In Re: Monumental

United States Court of Appeals
Fifth Circuit
F I L E D
In the April 2, 2004
United States Court of Appeals Charles R. Fulbruge III
for the Fifth Circuit Clerk
_______________

m 02-30540
_______________

IN THE MATTER OF:

MONUMENTAL LIFE INSURANCE COMPANY,
INDUSTRIAL LIFE INSURANCE LITIGATION.

MATTIE BRATCHER, ET AL.,

Plaintiffs,

MATTIE BRATCHER; JOHN BRATCHER;
CAROLINE BROWN,
ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED;
MARY SUE TRUESDALE;
MAXINE CASH,
ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED;
MILDRED BUFORD,
ALSO KNOWN AS MILDRED GAMLIN,
ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED,

Plaintiffs-Appellants,

VERSUS

NATIONAL STANDARD LIFE INSURANCE COMPANY, ET AL.,

Defendants,

MONUMENTAL LIFE INSURANCE COMPANY,

Defendant-Appellee.
 *************************

IN THE MATTER OF:

UNITRIN, INC.,
INDUSTRIAL LIFE INSURANCE LITIGATION.

ROSIE LEE COTHRAN, ET AL.,

Plaintiffs,

ELIZABETH WALKER,

Plaintiff-Appellee,

VERSUS

SECURITY INDUSTRIAL INSURANCE COMPANY, ET AL.,

Defendants,

MONUMENTAL LIFE INSURANCE COMPANY,

Defendant-Appellee.

2
 *************************

IN THE MATTER OF:

AMERICAN NATIONAL INSURANCE COMPANY,
INDUSTRIAL LIFE INSURANCE LITIGATION.

ROSE MARY ROACH,
ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED,

Plaintiff-Appellant,

VERSUS

AMERICAN NATIONAL INSURANCE COMPANY,

Defendant-Appellee.

3
 *************************

IN THE MATTER OF:

WESTERN & SOUTHERN LIFE INSURANCE CO.,
INDUSTRIAL LIFE INSURANCE LITIGATION.

JOSEPH BELL, ETC., ET AL.,

Plaintiffs,

JOSEPH BELL,
INDIVIDUALLY AND ON BEHALF OF OTHERS SIMILARLY SITUATED;
WILLA ELLIS, DOCTOR;
THELMA WALKER OATIS,
ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED;
ALMA HYDE,

Plaintiffs-Appellants,

VERSUS

WESTERN & SOUTHERN LIFE INSURANCE COMPANY,

Defendant-Appellee.

_______________________________

Appeal from the United States District Court
for the Eastern District of Louisiana
MDL Docket No. 1371,
Consolidated with No. 1391 and No. 1395
_________________________

4
 ON PETITION FOR REHEARING we reverse and remand.
(Opinion Aug. 13, 2003, 343 F.3d 331)
I.
This is a consolidation of civil rights actions
Before SMITH, DENNIS, and CLEMENT, against three life insurance companies: Monu-
Circuit Judges. mental Life Insurance Company (“Monumen-
tal”), American National Insurance Company
JERRY E. SMITH, Circuit Judge: (“ANICO”), and Western and Southern Insur-
ance Company (“Western and Southern”).
The petition for panel rehearing is Plaintiff policyowners, all of whom are black,
DENIED, and no judge in regular active ser- allege that, for decades, defendants discrimi-
vice having requested that the court be polled nated against them in the sale and administra-
on rehearing en banc, the petition for rehearing tion of low-value life insurance policies,
en banc is DENIED. The opinion, 343 F.3d known as industrial life policies,2 that have
331 (5th Cir. 2003), is withdrawn for the face amounts of $2000 or less and require
limited purpose of making minor adjustments small weekly or monthly premiums. Defen-
in the analyses contained in parts III.A, III.B, dants comprise over 280 companies that issued
and V. Although by far the greater portion of industrial life policies over a fifty- to sixty-five-
the opinion remains intact, we now issue a new year period.3
opinion, as follows:
Plaintiffs allege two overtly discriminatory
practices. First, they accuse defendants of
*********** placing blacks in industrial policies offering the
same benefits as do policies sold to whites, but
at a higher premium (dual rates). Second,
In what may be the ultimate negative value defendants allegedly placed blacks in specially-
class action lawsuit,1 plaintiffs challenge de- designed substandard industrial policies pro-
fendants’ alleged practice of paying lower ben- viding fewer or lower benefits than do com-
efits and charging higher premiums to blacks in
the sale of low-value life insurance. The dis-
2
trict court denied plaintiffs’ motion to certify Defendants defend this practice on the basis
a class pursuant to FED. R. CIV. P. 23(b)(2), that (1) the race-distinct pricing was justified;
finding, inter alia, that the majority of class (2) the practice was approved by regulators; (3) the
members would not benefit from injunctive racially discriminatory policies were no more pro-
relief. Based primarily on Allison v. Citgo fitable than were those sold to whites; and (4) some
Petroleum Co., 151 F.3d 402 (5th Cir. 1998), of the discriminatory policies were remediated.
3
Over the years, defendants have acquired other
insurance companies and thereby assumed blocks
1
A “negative value”suit is one in which class of in-force insurance policies issued by them.
members’ claims “would be uneconomical to liti- Monumental currently administers policies issued
gate individually.” Phillips Petroleum v. Shutts, by 200 different companies, while Western and
472 U.S. 797, 809 (1985); see also Castano v. Southern administers policies issued by approx-
Am. Tobacco Co., 84 F.3d 734, 748 (5th Cir. imately 80 companies. ANICO has assumed an in-
1996). determinate number of in-force policies.

5
parable plans sold to whites (dual plans). Plaintiffs sued for violations of 42 U.S.C.
These practices are memorialized in the in- §§ 1981 and 1982, seeking (1) an injunction
surer’s rate books and records, which explic- prohibiting the collection of discriminatory
itly distinguish dual rate and dual plan policies premiums, (2) reformation of policies to equal-
by race.4 Although, before filing their motion ize benefits, and (3) restitution of past premi-
for class certification, plaintiffs challenged the um overcharges or benefit underpayments.
insurers’ alleged practice of charging blacks Pursuant to 28 U.S.C. § 1407, the Judicial
substandard premiums because of non-racial Panel for Multidistrict Litigation (“MDL”)
underwriting factors, such as mental condition, consolidated the actions against Monumental
occupation, socioeconomic status, educational and transferred them to the Eastern District of
level, living conditions, and personal habits, Louisiana for pretrial proceedings. Later, the
plaintiffs no longer complain of such pretextual MDL Panel took the same action with the
underwriting procedures. cases against ANICO and Western and South-
ern.
Defendants state that they issued “hun-
dreds, perhaps thousands, of different indus- Plaintiffs moved for certification of a class
trial life insurance products” encompassing a pursuant to rule 23(b)(2), requesting that class
countless variety of underwriting standards. It members be provided notice and opt-out
is undisputed that all companies that sold dual rights. The district court denied certification,
rate or dual plan policies have not done so finding that plaintiffs’ claims for monetary re-
since the early 1970’s. Also, as early as 1988, lief predominate over their claims for injunc-
some insurers voluntarily adjusted premiums tive relief, making rule 23(b)(2) certification
and/or death benefits to equalize the amount of inappropriate. The court also found that, giv-
coverage per premium dollar. Still, plaintiffs en the large number of companies and policies
estimate that over 4.5 million of the 5.6 million involved, individualized hearings were neces-
industrial policies issued by defendants remain sary to determine damages and whether claims
in-force; many other policies have been termi- were barred by the statute of limitations. De-
nated, surrendered, or paid-up without remedi- fendants sought, and this court granted, inter-
ation.5 Defendants’ expert estimates that the locutory review pursuant to FED. R. CIV. P.
ratio of terminated policies to outstanding pol- 23(f).
icies is approximately five to one, meaning that
slightly more than one million policies remain II.
in-force. Defendants contend that class members
cannot be readily identified by way of the class
4
definition. A precise class definition is neces-
As an example, a 1962 ANICO rate book sary to identify properly “those entitled to
shows that, for a twenty-year-old black, a $500 relief, those bound by the judgment, and those
“20 Pay Life” industrial policy charged a weekly
entitled to notice.” 5 JAMES W. MOORE ET
premium of $0.41, while a twenty-year-old white
AL., MOORE’S FEDERAL PRACTICE § 23.21[6],
paid only $0.32.
at 23-62.2 (3d ed. 2003); see DeBremaecker
5
Plaintiffs allege that Monumental has not ad- v. Short, 433 F.2d 733, 734 (5th Cir. 1970).
justed any of its dual rate or dual plan policies. Some courts have stated that a precise class
ANICO adjusted one of its four discriminatory definition is not as critical where certification
“Standard No. 3 plans.

6
of a class for injunctive or declaratory relief is not to policies called substandard because of
sought under rule 23(b)(2).6 Where notice and other factors such as socio-economic under-
opt-out rights are requested, however, a pre- writing.”
cise class definition becomes just as important
as in the rule 23(b)(3) context. We agree with defendants’ observation
that, as written, the class definition includes all
Plaintiffs sought to certify a class comprised blacks who paid substandard rates or were
of “[a]ll African-Americans who own, or issued substandard plans. The definition
owned at the time of policy termination, an makes no distinction between class members
industrial life insurance policy that was issued who purchased dual rate or dual plan policies
as a substandard plan or at a substandard and those forced into substandard rates or sub-
rate.” Defendants argue that the plain lan- standard plans through the use of pretextual
guage of that definition does not comport with underwriting practices. In other words, one
the class plaintiffs seek to certify. As we have must look to the certification motion for an
noted, before moving for certification plaintiffs adequate description of the proposed class.
had included not only blacks who had pur-
chased dual rate or dual plan policies, but also Holding plaintiffs to the plain language of
blacks who allegedly were forced into sub- the class definition would be overly formalis-
standard plans, or forced to pay substandard tic. In the first place, the district court, in de-
rates, through the use of non-racial underwrit- nying certification, apparently did not consider
ing factors. the pretextual claims as part of the proposed
class. Though referring to the “mass of poli-
In their motion for certification, plaintiffs cies involved” and the “differing underwriting
narrowed the class, stating that “[t]he pro- practices among some 280 companies,” the
posed class does not include those who may court stated that in calculating damages, indi-
have been subjected to covert socio-economic vidualized hearings were necessary to account
forms of racial discrimination.” Plaintiffs spe- for the idiosyncracies of each policy. At no
cified that “the term ‘substandard’ applies to point did the court suggest that individualized
overt race-distinct dual premiums and plans, hearings were necessary to determine liability,
as would be necessary if pretextual underwrit-
ing claims were part of the class.
6
See Battle v. Commonwealth, 629 F.2d 269,
271 n.1 (3d Cir. 1980) (“Where . . . the class ac- Second, holding plaintiffs to the plain lang-
tion seeks only injunctive or declaratory relief, for uage of their definition would ignore the on-
which the notice provision of Fed. R. Civ. P. 23- going refinement and give-and-take inherent in
(c)(2) is not mandatory, the district court has even class action litigation, particularly in the for-
greater freedom in both the timing and specificity
mation of a workable class definition. District
of its class definition.”); Rice v. City of Philadel-
phia, 66 F.R.D. 17, 19 (E.D. Pa. 1974) (“[T]he
courts are permitted to limit or modify class
precise definition of the [(b)(2)] class is relatively definitions to provide the necessary precision.7
unimportant. If relief is granted to the plaintiff
class, the defendants are legally obligated to com-
7
ply, and it is usually unnecessary to define with See, e.g., Robidoux v. Celani, 987 F.2d 931,
precision the persons entitled to enforce compliance 937 (2d Cir. 1993) (“A court is not bound by the
. . . .”). (continued...)

7
If the class is certified on remand, we trust that III.
the plaintiffs or district court will amend the We review for abuse of discretion the denial
definition accordingly. of class certification. Jenkins v. Raymark In-
dus., 782 F.2d 468, 471-72 (5th Cir. 1986).
Defendants also argue that the definition “Implicit in this deferential standard is a recog-
terms “own, or owned,” “industrial life insur- nition of the essentially factual basis of the cer-
ance policy,” “substandard plan,” and “sub- tification inquiry and of the district court’s in-
standard rate” are ambiguous, further compli- herent power to manage and control pending
cating identification of class members. This litigation.” Allison, 151 F.3d at 408. We re-
argument, too, is overly formalistic. See For- view de novo however, the question whether
bush, 994 F.2d at 1105-06. the district court applied the correct legal stan-
dard. Forbush, 994 F.2d at 1104.
Plaintiffs’ filings in the district court clari-
fied any ambiguities by stating that “the class All classes must satisfy the four baseline re-
is limited to industrial policies sold at a sub- quirements of rule 23(a): numerosity, com-
standard (i.e., higher) rate for African-Ameri- monality, typicality, and adequacy of represen-
cans and a lower rate for Caucasians, or as a tation.8 FED. R. CIV. P. 23(a). Assuming these
substandard plan (i.e., a more costly plan) for requirements are satisfied, a rule 23(b)(2) class
African-Americans and a corresponding less may be certified if “the party opposing the
expensive plan for Caucasians.” Plaintiffs de- class has acted or refused to act on grounds
fine industrial life insurance policies as generally applicable to the class, thereby mak-
“(1) policies labeled as ‘industrial’ or (2) those ing appropriate final injunctive relief or corre-
policies with a face amount of less than sponding declaratory relief with respect to the
$2,000.00 and weekly or monthly home pre- class as a whole.” FED. R. CIV. P. 23(b)(2).
mium collection.” Defendants were provided Plaintiffs premise rule 23(b)(2) certification on
adequate notice and discovery by which to ar- their request for an injunction prohibiting the
gue that the narrowed class cannot be certified further collection of discriminatory premiums.
pursuant to rule 23(b)(2).
A.
The court observed that “many” proposed
class membersSSthose whose policies have
lapsed, those whose policies have already been
voluntarily adjusted by defendants, and those
7
(...continued) whose death benefits already have been
class definition proposed in the complaint and paidSSwould not benefit from injunctive relief.
should not dismiss the action simply because the The court concluded that “this is a case in
complaint seeks to define the class too broadly.”);
which individuality overrides any bland group-
Harris v. Gen. Dev. Corp., 127 F.R.D. 655, 659
(N.D. Ill. 1989) (“[I]t is certainly within this
think, and money becomes the prime goal . . .
court’s discretion to limit or redefine the scope of
the class.”); Meyer v. Citizens & S. Nat’l Bank,
8
106 F.R.D. 356, 360 (M.D. Ga. 1985) (“The The district court noted that “oral argument
Court has discretion in ruling on a motion to certify unveiled serious adequacy of representation is-
a class. This discretion extends to defining the sues,” but did not rely on this basis in denying
scope of the class.”) (citations omitted). certification.

8
not injunctive relief.” Rule 23(b)(2) certifica- Instead, Allison looked to the nature of the
tion is improper, the court held, where the rule 23(b)(2) device in defining when monetary
class’s request for injunctive relief merely relief predominates. That rule’s focus on in-
serves as a bootstrap for a claim of monetary junctive and declaratory relief presumes a class
damages. best described as a “homogenous and cohesive
group with few conflicting interests among its
In Allison, we carefully explained the state- members.” Id. at 413. Class certification
ment in the advisory committee notes that rule centers on the defendants’ alleged unlawful
23(b)(2) certification “does not extend to cas- conduct, not on individual injury. Once mone-
es in which the appropriate final relief relates tary damages enter the picture, however, class
exclusively or predominantly to money dam- cohesiveness is generally lost, because
ages.” FED. R. CIV. P. 23 advisory committee “[m]onetary remedies are more often related
notes (emphasis added).9 Allison did not hold, directly to the disparate merits of individual
as the district court believed, that monetary re- claims.” Id. (citations omitted). Where the
lief predominates where it is the “prime goal” need to address the merits of individual claims
or a mere bootstrap to injunctive relief. In- requires separate hearings, the efficiency
stead, “determining whether one form of relief gained by class litigation is lost.
actually predominates in some quantifiable
sense is a wasteful and impossible task that In Allison, therefore, we held, id. at 415,
should be avoided.” Allison, 151 F.3d at 412 that monetary relief, to be viable in a rule
(citing 7A CHARLES A. WRIGHT ET AL., FED- 23(b)(2) class, must “flow directly from
ERAL PRACTICE AND PROCEDURE § 1775, at liability to the class as a whole on the claims
470 (2d ed. 1986)). In other words, certifica- forming the basis of the injunctive or
tion does not hinge on the subjective intentions declaratory relief.” Monetary relief must be
of the class representatives and their counsel in incidental, meaning that it is “capable of
bringing suit.10 computation by means of objective standards
and not dependent in any significant way on
the intangible, subjective differences of each
9
Allison, 151 F.3d at 411-12 (“The Advisory class member’s circumstances.”11 Id.
Committee Notes make no effort to define or ex- Additional hearings to resolve “the disparate
plain the concept. Interpreting the term literally, merits of each individual’s case” should be
predominant means ‘controlling, dominating, [or] unnecessary. Id.
prevailing.’ But how that translates into a work-
able formula for comparing different types of rem-
10
edies is not at all clear.”) (citation omitted). (...continued)
the injunctive or declaratory relief sought” and “the
10
But see Molski v. Gleich, 318 F.3d 937, 950 injunctive or declaratory relief sought would be
(9th Cir. 2003) (expressly rejecting Allison and in- both reasonably necessary and appropriate were
stead “focus[ing] on the language of Rule 23(b)(2) the plaintiffs to succeed on the merits”).
and the intent of the plaintiffs in bringing the suit”);
11
Robinson v. Metro-North Commuter R.R., 267 The predomination requirement serves two
F.3d 147, 163-64 (2d Cir. 2001) (stating that rule basic purposes, namely the interests of class mem-
23(b)(2) certification is appropriate only where bers who may wish to pursue monetary claims in-
“reasonable plaintiffs would bring the suit to obtain dividually, and interests of judicial economy. Alli-
(continued...) son, 151 F.3d at 415.

9
 Of course, certification under rule 23(b)(2) members of notice and opt-out protections.”12
is appropriate only if members of the proposed Indeed, we suggested in Allison , 151 F.3d at
class would benefit from the injunctive relief 413, that monetary relief may predominate
they request. The question whether the “when its presence in the litigation suggests
proposed class members are properly seeking that the procedural safeguards of notice and
such relief is antecedent to the question wheth- opt-out are necessary.” Defendants seize on
er that relief would predominate over money this point, arguing that plaintiffs’ request for
damages. notice and opt-out is a tacit admission that rule
23(b)(2) certification is inappropriate. This
In Bolin v. Sears Roebuck & Co., 231 F.3d ignores the discretion given a district court to
970 (5th Cir. 2000), we considered a proposed order notice and opt-out rights when certifying
rule 23(b)(2) class of one million consumers a rule 23(b)(2) class. See FED. R. CIV. P.
who claimed to seek injunctive relief, alleging 23(d)(2).
that defendant had employed various unlawful
practices to coerce payment of otherwise-dis- As “fundamental requisites of the
charged pre-bankruptcy debt. Before applying constitutional guarantees of procedural due
the Allison predominance test, however, we process,” Eisen v. Carlisle & Jacquelin, 417
observed that “[m]ost of the class consists of U.S. 156, 174 (1974), notice and opt-out are
individuals who do not face further harm from mandatory for damage classes certified under
Sear’s [sic] actions.” Id. at 978. Because only rule 23(b)(3). Though rule 23 does not
a negligible proportion of proposed class explicitly extend these safeguards to rule
members were properly seeking injunctive re- 23(b)(2) classes, due process requires the
lief, we held that rule 23(b)(2) certification provision of notice where a rule 23(b)(2) class
was inappropriate. seeks monetary damages.13

Here, by contrast, defendants’ and On the other hand, there is no absolute
plaintiffs’ experts estimate that between one right of opt-out in a rule 23(b)(2) class, “even
million and 4.5 million of 5.6 million issued where monetary relief is sought and made
policies remain in-force. Although the exact
number of class members continuing to pay
12
discriminatory premiums is unknown, the Bolin, 231 F.3d at 976; see also McManus v.
proportion is sufficient, absent contrary Fleetwood Enters., 320 F.3d 545, 554 (5th Cir.
evidence from defendants, that the class as a 2003) (“[C[]lass members would potentially re-
whole is deemed properly to be seeking injunc- ceive a poor substitute for individualized money
tive relief. damages, without the corresponding notice and opt-
out benefits of Rule 23(b)(3) . . . .”).
B. 13
Allison, 151 F.3d at 412 n.4 (citing Johnson
Bolin reflects a concern that plaintiffs may v. Gen. Motors Corp., 598 F.2d 432, 436-38 (5th
attempt to “shoehorn damages actions into the Cir. 1979)); Penson v. Terminal Transp. Co., 634
Rule 23(b)(2) framework, depriving class F.2d 989, 994 (5th Cir. Unit B Jan. 1981). The
type of notice afforded to rule 23(b)(2) class mem-
bers seeking monetary relief will not always be
“equivalent to that required in (b)(3) actions.”
Johnson, 598 F.2d at 438.

10
available.” Penson, 634 F.2d at 994; Kincade All of this further demonstrates the futility
v. Gen. Tire & Rubber Co., 635 F.2d 501, of the district court’s and dissent’s inquiry as
605-07 (5th Cir. Jan. 1981). Under our prece- to whether the “prime goal” of the class is in-
dent, should the class be certified on remand, junctive or monetary relief. The rule 23(b)(2)
class members must be provided adequate predominance requirement, by focusing on un-
notice, and the district court should consider iform relief flowing from defendants’ liability,
the possibility of opt-out rights.14 “serves essentially the same functions as the
procedural safeguards and efficiency and man-
Allison’s statement that monetary relief ageability standards mandated in (b)(3) class
may predominate where notice and opt-out are actions.” Allison, 151 F.3d at 414-15.
necessary reflects only the inescapable fact that Therefore, to deny certification on the basis
such safeguards are most appropriate where that the damage claims would be better
individual issues diminish class cohesiveness. brought as a rule 23(b)(3) class serves no
Then, conflicts among class members and is- function other than to elevate form over
sues of adequate representation are most likely substance.16 Indeed, interests of judicial
to surface. Rule 23(b)(3) is the default vehicle economy are best served by resolving
for certification, but only because notice and
opt-out rights are mandatory components. A
15
district court is empowered by rule 23(d)(2) to (...continued)
provide notice and opt-out for any class members are entitled to notice or opt-out rights.”
action, so rule 23(b)(2) certification should not As mentioned, this court’s precedent requires that
be denied on the mistaken assumption that a notice be provided where a rule 23(b)(2) class
rule 23(b)(3) class is the only means by which seeks damages, see supra note 13 and
accompanying text, so it is circular for the dissent
to protect class members.15
to argue notice as a basis for denying certification.
Our direction to the district court to consider the
possibility of opt-out rights speaks nothing as to
14
See Jefferson v. Ingersoll Int’l, Inc., 195 whether such rights are necessary or even
F.3d 894, 898 (7th Cir. 1999) (contemplating the desirable.
use of opt-out rights for a rule 23(b)(2) class); Eu-
16
bank v. Billington, 110 F.3d 87, 94 (D.C. Cir. Our view that the rule 23(b)(2) and (b)(3)
1997) (holding that the language of rule 23 is suf- devices may work in tandem is strengthened by the
ficiently flexible to afford district courts the roots of subdivision (b)(2), which was added “to
discretion to grant opt-out rights for rule 23(b)(2) Rule 23 in 1966 primarily to facilitate the bringing
classes). of class actions in the civil rights area.” 7A
CHARLES A. WRIGHT ET AL., FEDERAL PRACTICE
15
One of the dissent’s two reasons for finding AND PROCEDURE § 1775, at 470 (2d ed. 1986).
class certification inappropriate concerns our sup- Before its adoption, the rules made no explicit
posed “suggestion” that notice and opt-out rights reference to class actions involving injunctive or
are necessary. In Allison, 151 F.3d 414, however, declaratory relief, and “there was some uncertainty
we explained that “[t]he fact that the predomination whether a class action seeking one of those
requirement serves to protect the rights of class remedies was an appropriate device for vindicating
members . . . does not imply . . . that the civil rights.” Id. at 470-71. Rule 23(b)(2) was
availability of monetary relief in a (b)(2) class adopted to facilitate the use of injunctive relief, not
action depends solely or directly on whether class to compartmentalize claims for damages under rule
(continued...) 23(b)(3).

11
plaintiffs’ claims for injunctive and monetary nouncement has been limited to the context of
relief together. title VII backpay, a remedy designated by stat-
ute as “equitable.” 42 U.S.C. § 2000e-5(g)(1);
IV. Great-West Life & Annuity Ins. Co. v. Knud-
Applying Allison’s predominance test, the son, 534 U.S. 204, 218 n.4 (2002). Backpay
district court determined that the requested is therefore unique in that it is “an integral
monetary relief does not flow from liability to component of Title VII’s ‘make whole’
the class as a whole. The court stated that remedial scheme.” Allison, 151 F.3d at 415;
“many and a variety of hearings would be re- see also Johnson v. Ga. Highway Express,
quired to determined personalized harm to Inc., 417 F.2d 1122, 1125 (5th Cir. 1969).
each individual plaintiff because of the mass of Not coincidentally, as compared to compen-
policies involved, differing underwriting prac- satory damages, “calculation of back pay gen-
tices among some 280 companies, differing erally involves less complicated factual de-
built-in benefits, account dividends, and age at terminations and fewer individual issues.”
policy issuance.” Coleman v. Gen. Motors Acceptance Corp.,
296 F.3d 443, 449 (6th Cir. 2002). In Allison,
A. 151 F.3d at 415, we recognized that, for this
Plaintiffs contend they seek equitable res- reason, backpay generally does not
titution in the form of a constructive trust for predominate over injunctive or declaratory
class members who no longer have in-force relief.
policies. By characterizing this relief as
equitable, plaintiffs hope to demonstrate that It would be mistaken to presume that be-
that that relief is inherently compatible with cause backpaySSa remedy readily calculable on
rule 23(b)(2) certification, thereby avoiding a classwide basisSSis compatible with a rule
Allison’s monetary predominance inquiry. De- 23(b)(2) class, any other remedy designated as
fendants argue that plaintiffs, who never used equitable may automatically piggyback a claim
the term “constructive trust” in the district for injunctive relief. To be sure, equitable
court, are trying to “re-package” their monetary remedies are less likely to
straightforward request for damages. predominate over a class’s claim for injunctive
relief, but this has more to do with the uniform
Equitable monetary relief is compatible with character of the relief rather than with its label.
a rule 23(b)(2) class.17 Importantly, this pro- Therefore, rather than decide whether
plaintiffs’ claim for restitution is legal or
equitable in nature, we apply Allison and ex-
17
amine whether the claim predominates over
See Allison, 151 F.3d at 415-16 (“If the in- the request for injunctive relief.
stant case involved only claims for equitable mon-
etary relief, Pettway [v. Am. Cast. Iron Pipe Co.,
494 F.2d 211, 257 (5th Cir. 1974)] would control.
B.
Pettway, however, did not address the availability This is not a case in which class members
in (b)(2) class actions of other forms of monetary are entitled to a one-size-fits-all refund;
relief, such as compensatory and punitive damages
. . . .”); Pettway, 494 F.2d at 257 (“All that need
17
be determined is that conduct of the party opposing (...continued)
the class is such as makes such equitable relief appropriate.”).

12
assuming liability is established, individual in which class members’ claims for
damages will depend on the idiosyncracies of compensatory and punitive damages
the particular dual rate or dual plan policy. necessarily “implicate[] the subjective
For example, the age at which a class member differences of each plaintiff’s circumstances.”
purchased a dual rate policy will have an im- Id. at 417. Rather, assuming that unlawful
pact on how long the insured paid premiums discrimination is found, class members
and consequently on the amount of damages. automatically will be entitled to the difference
Some policies contain built-in benefits between what a black and a white paid for the
covering occurrences outside of death, such as same po licy. Not coincidentally, such
loss of limb; others pay periodic dividends. As damages flow from liability in much the same
we have observed, some defendants, manner that an award of backpay results from
beginning in 1988, voluntarily adjusted a finding of employment discrimination.
premiums and benefits for some policies sold Pettway, 494 F.2d at 256-58.
on a race-distinct basis.
We are well aware that, as Allison qualifies,
Plaintiffs propose using standardized 151 F.3d at 415, the calculation of monetary
formulas or restitution grids to calculate damages should not “entail complex indi-
individual class members’ damages. vidualized determinations.” Although it is ar-
Defendants counter that “thousands” of grids guable that the construction of thousands of
must be constructed to account for the myriad restitution grids, though based on objective
of policy variations. That may be so, but the data, involves the sort of complex data manip-
monetary predominance test does not contain ulations forbidden by Allison, we read Allison
a sweat-of-the-brow exception. Rather, we to the contrary. The policy variables are iden-
are guided by its command that damage tifiable on a classwide basis and, when sorted,
calculation “should neither introduce new and are capable of determining damages for indi-
substantial legal or factual issues, nor entail vidual policyowners; none of these variables is
complex individualized determinations.” unique to particular plaintiffs.19 The pre
Allison, 151 F.3d at 415.

19
In the list of policy variables cited by de- In this sense, the instant case is unlike O’Sul-
fendants and the district court, none requires livan v. Countrywide Home Loans, Inc., 319 F.3d
the gathering of subjective evidence.18 This is 732, 744-45 (5th Cir. 2003), in which we found
not, for example, like Allison, a title VII case monetary damages predominant in a proposed rule
23(b)(3) class alleging violations of Texas’s
statute prohibiting the unauthorized practice of
law. Non-lawyers were alleged to have used “legal
18
Had plaintiffs not limited their proposed class skill or knowledge” in the preparation of mortgage
to dual rate and dual plan policies, individual hear- closing documents. Whether certain practices by
ings would be necessary to determine whether pre- the non-lawyers violated the statute was
textual underwriting practices were used to force determinable on a classwide basis; we explained,
the respective class members into substandard however, that monetary damages predominated,
plans. In that instance, we agree with the district because the extent of these practices varied by
court that the large number of defendants and un- transaction, and plaintiffs were entitled to a refund
derwriting practices would be relevant to finding only for those practices that violated the statute.
the predominance of monetary damages. (continued...)

13
valence of variables common to the class V.
makes damage computation “virtually a me- As noted, defendants have not sold dual
chanical task.” Alabama v. Blue Bird Body plan or dual rate policies since the 1970’s;
Co., 573 F.2d 309, 326-27 (5th Cir. 1978) some class members purchased their policies
(quoting Windham v. Am. Brands, Inc., 565 as far back as the 1940’s. The district court
F.2d 59, 68 (4th Cir. 1977)).20 denied certification also on the basis that indi-
vidualized hearings are necessary to determine
Finally, defendants’ records contain the in- expiration of the statute of limitations for par-
formation necessary to determine disparities ticular sets of policies. The predominance of
between, on the one hand, dual rate and dual individual issues necessary to decide an affirm-
plan policies, and on the other hand, plans sold ative defense may preclude class certification.
to whites. Damage calculations do not require Castano, 84 F.3d at 744. Limitations is an af-
the manipulation of data kept outside firmative defense. FED. R. CIV. P. 8(c);
defendants’ normal course of business. 2 JAMES W. MOORE ET AL., MOORE’S
Defendants’ complaints to the contrary are FEDERAL PRACTICE § 8.07[1], at 8-34 (3d ed.
belied by the fact that, since 1988, many 2003).
policies have been adjusted to account for
racial disparity. Although, under §§ 1981 and 1982, state
law governs the substantive limitations period,
federal law determines when the period
accrues. Perez v. Laredo Junior Coll., 706
19
F.2d 731, 733 (5th Cir. 1983). It commences
(...continued) when the plaintiff either has actual knowledge
Therefore, each transaction had to be dissected to
of the violation or has knowledge of facts that,
determine the extent of liability and damages.
in the exercise of due diligence, would have
20
One is left wondering in what circumstances led to actual knowledge.21 State law may
(if any) the dissent would permit monetary further toll the running of limitations. Gartrell
damages in a rule 23(b)(2) class. Remarkably, the v. Gaylor, 981 F.2d 254, 257 (5th Cir. 1993).
dissent makes no attempt to explain its view that
insurance policy factors such as premium rate, Doubtless most class members, the majority
issue age, and benefits paid are based on of whom are poor and uneducated, remain
“intangible, subjective differences.” Allison, 151 unaware of defendants’ discriminatory
F.3d at 415. Instead, Allison’s statement that practices. Of the thirteen representative
damages be “capable of computation by means of plaintiffs, defendants point to only one, Jo Ella
objective standards” is ideal for refund-type cases Brown, whose claim may have expired
such as this, in which damages are calculable using because of actual knowledge of defendants’
factors developed and maintained in the course of
practices.
defendants’ business. Id. The dissent evidently
would limit damages in rule 23(b)(2) classes to
instances in which there is no variance among the To hold that each class member must be de-
“specific characteristics of each policy and
policyholder,” a standard that necessarily would
21
require that each class members’ damages be E.g., Harris v. Hegmann, 198 F.3d 153, 156-
identical. It is safe to say that the dissent’s novel 57 (5th Cir. 1999); Jensen v. Snellings, 841 F.2d
approach is unsupported by caselaw. 600, 606 (5th Cir. 1988).

14
posed as to precisely when, if at all, he learned 600 F.2d 1148, 1170 (5th Cir. 1979). The dis-
of defendants’ practices would be tantamount trict court believed constructive notice to be
to adopting a per se rule that civil rights cases an individual issue, or at least a regional one,
involving deception or concealment cannot be stating that “whether a plaintiff in Michigan, as
certified outside a two- or three-year period.22 compared to a plaintiff in Louisiana, had con-
Waste Mgmt. Holdings, Inc., 208 F.3d 288, structive notice, is a fact issue which needs to
296 (1st Cir. 2000). Such a result would fore- be determined individually and not on a class-
close use of the class action device for a broad wide basis.”
subset of claims, a result inconsistent with the
efficiency aims of rule 23. Though individual Whether the media reports were sufficiently
class members whose claims are shown to fall publicized so as to provide constructive notice
outside the relevant statute of limitations are is an issue reserved for the merits. Our an-
barred from recovery, this does not establish alysis is limited to whether this issue is
that individual issues predominate, particularly determinable on a classwide basis. Had
in the face of defendants’ common scheme of defendants provided evidenceSSor even
fraudulent concealment. allegedSSthat media treatment of this issue
was more prevalent in some regions of the
Instead, defendants rely on a theory of con- country than in others, the district court’s
structive notice, arguing that widespread me- observation that individualized hearings are
dia reporting of the issue over the last several required to determine the geographic reach of
decades should have “excite[d] the inquiry of constructive notice might be sustainable.
a reasonable person.” Conmar Corp. v. Mistui
& Co. (U.S.A.), Inc., 858 F.2d 499, 504 (9th The requirement of “widespread publicity,”
Cir. 1998). Where events receive “widespread McGovern, 621 F.2d at 154, suggests,
publicity, plaintiffs may be charged with however, that the appropriate frame of
knowledge of their occurrence.” United Klans reference is the national media market, at least
of Am. v. McGovern, 621 F.2d 152, 154 (5th for issues of national importance. Several
Cir. 1980); In re Beef Antitrust Indus. Litig., publications listed by defendants, including the
Washington Post, the Wall Street Journal, and
USA Today, are available throughout the Unit-
22
The district court’s reliance on Barnes v. Am. ed States, and although many other
Tobacco Co., 161 F.3d 127 (3d Cir. 1998), is mis- publications are local newspapers, that fact is
placed. The proposed class, all smokers before age entirely consistent with national treatment of
nineteen, brought medical monitoring claims the issue. Neither the district court nor
against defendant tobacco companies. The court, defendants give good reason for
id. at 149, determined that individual issues existed geographically splicing constructive notice.
as to the accrual of the statute of limitations, which
We therefore have no difficulty concluding
required a determination for each plaintiff as to
when “he began smoking and how much he has
that whether plaintiffs were provided
smoked since then.” By definition, the limitations constructive notice is an issue that can be
period had commenced for each and every class decided on a classwide basis.
member. Here, accrual of the statute of limitations
is premised on defendants’ common practice of The order denying class certification is
concealment, so a presumption of unawareness by REVERSED, and this matter is REMANDED
the plaintiff class is warranted.

15
 for further proceedings consistent with this
opinion. We express no view on the district
court’s ultimate decision whether to certify in
light of today’s opinion, nor do we opine on
the ultimate merits of the substantive claims.

EDITH BROWN CLEMENT, Circuit Judge, dissenting:

It is a factual determination that relief sought relates predominantly to money damages. Allison

v. Citgo Petroleum Corp., 151 F.3d 402, 408 (5th Cir. 1998). It is a legal conclusion that this factual

determination should control class certification. Id. The former factual determination is subject to a

review for abuse of discretion; the latter legal conclusion is subject to de novo review. Id. This Court

reviews de novo whether a district court has applied the correct factual examination to certify a class

under Rule 23(b)(2). See id. Upon concluding that the district court has applied the correct factual

examination, this Court reviews the factual findings of that examination for clear error.

The majority seems to muddle these distinct standards of review. The majority engages in de novo

factfinding as it reviews the district court’s determination that the relief sought relates predominantly

to money damages. The majority does so with regard to two of the district court’s findings: (1) that

money damages do not flow from liability to the class as a who le; and (2) that a predominant

proportion of the class does not seek injunctive relief. In setting aside these factual findings, the

majority fails to show that the district court has committed clear error.

16
 The majority acknowledges that “the district court determined that the requested monetary relief

does not flow from liability to the class as a whole,” and further accedes that “it is arguable” that the

damages calculations “involve[] the sort of complex data manipulations forbidden by Allison . . . .”

Nevertheless, the majority concludes that class certification is proper merely because “variables

common to the class” exist. In effect, the majority identifies a reason supporting the district court

opinion—the appearance of complex damages calculations—and a reason contravening that

opinion—the existence of variables common to the class. The majority then proceeds to credit the

latter reason as being more credible than the former. Yet although the majority does cite this reason

for its factual determination, it fails to show that the district court’s finding rises to the level of clear

error. Given the fact that the damages calculations appear complex, the alleged inconsistent reason

does not imply that the court abused its discretion.

The second finding of fact that the majority reviews de novo concerns the proportion of injunctive-

relief beneficiaries. The majority concludes that the proportion of injunctive-relief beneficiaries

predominates the class. This is a necessary determination to grant certification under Rule 23(b)(2).

See Bolin v. Sears, Roebuck & Co., 231 F.3d 970, 978 (5th Cir. 2000) (denying certification because

“most of the class” consists of individuals who do not face further harm, and opining that because

those plaintiffs have nothing to gain from an injunction, “the definition of the class shows that most

of the plaintiffs are seeking only damages”); accord Majority Opinion, __ F.3d __ , __ (5th Cir. 2004)

(“Because only a negligible proportion of proposed class members were properly seeking injunctive

relief, we held [in Bolin] that rule 23(b)(2) certification was inappropriate.”) (emphasis added). As

Bolin indicates, this factual “proportionality” determination can be dispositive.

Here, the Plaintiffs allege that the proportion of injunctive-relief beneficiaries constitutes over 80%

17
of the class, whereas the Defendants assert that the proport ion is only 18%. After conducting a

hearing, the district court opined that the “true central relief sought by the plaintiffs [was] for monetary

damages.” 208 F.R.D. 571, 574 (E.D. La. 2002). This finding implies that the district court

discredited the Plaintiffs’ factual assertion of 80%. Nothing in the record intimates that the court

would have abused its discretion in only crediting the Defendants’ estimate.

Unlike the finding of the district court, the majority credits the Plaintiffs’ factual assertion. Were

the majority to have credited only the Defendants’ estimate of 18%, it would not have been able to

declare that “the proportion is sufficient”; it would not have been able to determine that the relief

sought does not relate predominantly to money damages. To reach its ultimate finding of fact, then,

the majority is forced to give credence to the Plaintiffs’ assertion of injunctive-relief beneficiaries.

Notably, the majority fails to provide any stated reason for crediting the Plaintiffs’ assertion with as

much weight as it does the Defendants’. It fails to explain how the district court abused its discretion

on this issue.

Furthermore, even if it were unclear whether the district court only credited the Defendants’ factual

assertion, this would be no cause for the majority to give weight to the Plaintiffs’ assertion. Because

the underlying factual issue of proportionality is central to the ultimate question of fact, this Court

should have at least remanded this case for clarification of this proportionality issue. On remand, the

district court could specify whether it in fact did credit the Plaintiffs’ assertion. A district court, rather

than an appellate court, is the proper judicial forum to make findings of fact. The majority’s crediting

of the Plaintiffs’ factual assertion regarding the proportion of injunctive-relief beneficiaries is

unwarranted.

Under the applicable abuse-of-discretion standard, the majority’s determination that the Plaintiffs’

18
claims for money damages do not predominate is unjustified appellate factfinding. I respectfully

dissent.

19