United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 13, 1997 Decided March 27, 1998
No. 97-5004
Walter J. Thomas, et al.,
Appellees/Cross-Appellants
v.
Madeleine K. Albright, Secretary of State,
Appellant/Cross-Appellee
Consolidated with
97-5018
Appeals from the United States District Court
for the District of Columbia
(No. 86cv02850)
Cynthia A. Schnedar, Assistant U.S. Attorney, argued the
cause for appellant/cross-appellee, with whom Mary Lou
Leary, U.S. Attorney at the time the briefs were filed, John
D. Bates, R. Craig Lawrence, and John Oliver Birch, Assis-
tant U.S. Attorneys, were on the briefs.
Barbara B. Hutchinson argued the cause for appel-
lees/cross-appellants Walter J. Thomas, et al., with whom
Theresa L. Watson was on the briefs.
Avis E. Buchanan, argued the cause for amicus curiae
plaintiff class, with whom Warren E. Connelly, Charles L.
Warren, Richard P. Schlegel, and Joseph M. Sellers were on
the briefs.
Before: Edwards, Chief Judge, Ginsburg, Circuit Judge,
and Buckley, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge Ginsburg.
Ginsburg, Circuit Judge: This is a Title VII class action in
which the plaintiffs allege that the United States Department
of State discriminated against African-American Foreign Ser-
vice Officers. The Department and a group of nine class
members separately appeal from the district court's approval
of the class settlement. The Department appeals the district
court's decision to permit class members to opt out of the
class settlement. The nine cross-appellants challenge the
district court's approval of the consent decree as fair and
reasonable. We affirm the district court's decision that the
consent decree is fair and reasonable, but reverse its decision
allowing opt-outs.
I. Background
In 1984 Walter J. Thomas, a former Foreign Service Offi-
cer, filed an administrative complaint on behalf of himself and
other African-American FSOs, alleging racial discrimination
in the Department's employment practices. In 1986, after
the Department had rejected Thomas' complaint, he and
another former FSO filed a class action complaint in district
court alleging that the Department engaged in racially dis-
criminatory employment practices and retaliated against
those who complained about them. Thomas v. Christopher,
169 F.R.D. 224, 229 (D.D.C. 1996).
The plaintiffs moved for class certification under Federal
Rule of Civil Procedure 23(b)(2). The court denied their
motion but permitted the plaintiffs to file an amended com-
plaint adding several more plaintiffs. The parties conducted
discovery for six years and, beginning in 1993, engaged in
settlement negotiations, eventually under the supervision of a
magistrate judge. In 1994 the plaintiffs filed another motion
for class certification, in which they contended that although
their class could be certified pursuant to Rule 23(b)(3), "it is
more appropriately maintained as a Rule 23(b)(2) class ac-
tion." The court deferred ruling upon this motion pending
the outcome of the settlement negotiations.
In 1995 the parties reached a settlement in principle, and in
January 1996 they signed a consent decree. The consent
decree "resolves all claims that were or could have been
brought" by African-American FSOs between 1984 and 1996
based upon racial discrimination in promotions, awards, ten-
uring, termination, performance reviews, assignments, and
training, or upon retaliation for complaining about such dis-
crimination. The parties agreed that the court would certify
the class pursuant to Rule 23(b)(2).
The consent decree provided for the following relief:
(1) Monetary Relief--The Department agreed to pay a
total of $3.8 million, to be allocated as follows: (a) $125,000
for the named plaintiffs ($40,000 to Thomas for "his leader-
ship and coordinating role" and $85,000 divided equally
among the 29 other named plaintiffs); (b) $2.9 million for
those who experienced delays in and denials of promotions, to
be allocated upon the basis of a formula specified in the
consent decree, but not to class members who would receive a
promotion under the consent decree or who had been promot-
ed at the same rate as white employees; and (c) $775,000 for
class members who had been terminated, of which at least
$200,000 was to be distributed formulaically to those who
were either terminated for unsatisfactory performance or
constructively discharged, and up to $575,000 of which was
reserved for a maximum of four recipients to be chosen upon
the basis of, among other things, the severity of the discrimi-
nation and the degree of economic hardship they had suf-
fered.
(2) Promotions--The Department agreed to give retroac-
tive promotions to the 16 mid-level class members and to the
one senior-level class member who had been at their current
grade-levels for the longest time and had been recommended
previously for promotion.
(3) Reinstatement--The Department agreed to offer a new
five-year appointment to each of four class members who had
been fired when they failed to get tenure within the required
time.
(4) Injunctive and Prospective Relief--The Department
agreed to: (a) submit to an injunction against its discriminat-
ing on the basis of race or retaliating for equal employment
opportunity activities; (b) create a Council for Equality in the
Workplace to monitor the EEO activities of the Department;
(c) modify its employee evaluation reports and engage a
consultant to help determine whether further revisions are
necessary; (d) revise and expand its diversity and EEO
training; (e) establish a working group to monitor the grant
of awards to employees; (f) use its best efforts to include an
African-American on any board considering an African-
American for termination; (g) continue development of an
electronic personnel database to monitor employment actions;
(h) report employment and EEO information to class counsel
for four years; and (i) adopt an affirmative action plan
approved by the Equal Employment Opportunity Commis-
sion.
(5) Attorneys' Fees--The Department agreed to pay $2.1
million in attorneys' fees, plus an additional amount for any
services rendered after the district court's preliminary ap-
proval of the consent decree.
Class counsel and the Department also entered into a letter
agreement providing that (1) the consent decree would not
address the issue of opt-outs; and (2) class counsel would (a)
support the settlement in court as "fair and reasonable to the
class as a whole"; (b) not take a legal position regarding opt-
outs other than to advise the court that it "may have the
discretion to allow opt outs"; and (c) not advocate that class
members opt out.
In March the district court held a two-day hearing and
preliminarily approved the consent decree. The court then
ordered that the consent decree and notice of the fairness
hearing be sent to all known class members. 169 F.R.D. at
231. The notice advised class members that the court might
grant them the right to opt out. Of 359 class members, 34
wrote the court in support of the consent decree and 55 wrote
in opposition. Id. at 235.
In June class members were informed of their individual
awards under the consent decree. The Department, as
agreed, retroactively promoted 17 class members and rein-
stated four. It awarded an average of $10,900 in promotion
damages to 265 class members. Twenty-nine class members
received an average termination award of $16,400, and the
four class members who had incurred the greatest injuries
received an average termination award of $75,000. Id. at
234-35.
At the fairness hearing later that month 14 class members
testified; three supported the consent decree, eight opposed
it, and three were "ambivalent or neutral." Id. at 235. The
court required the Department to send notices to opponents
of the agreement informing them that if they wished to opt
out then they had to file a motion stating "the reasons for this
request, and any law" supporting it. Of the nineteen class
members who filed motions to opt out all but nine chose
ultimately to remain in the class.
The court certified the class under Rule 23(b)(2) and ap-
proved the consent decree pursuant to Rule 23(e). The court
found that the settlement was "negotiated at arm's length and
presents no danger of collusion"; it then held that the
consent decree was fair and reasonable in light of the disput-
ed evidence and the risks of litigation. Nonetheless, the
court allowed those class members so desiring to opt out of
the consent decree. Id. at 239-44.
II. Analysis
The Department of State appeals the district court's deci-
sion permitting opt-outs, while the cross-appellants, nine
members of the plaintiff class, object to the court's approval
of the consent decree. Class counsel submitted a brief in
support of the consent decree but did not take a position
concerning the dissidents' right to opt out.
A. Fairness of the Consent Decree
Rule 23(e) states that "[a] class action shall not be dis-
missed or compromised without the approval of the court."
Before it can approve a settlement a district court "must find
that the settlement is fair, adequate and reasonable and is not
the product of collusion between the parties." Cotton v.
Hinton, 559 F.2d 1326, 1330 (5th Cir. 1977); see Isby v. Bayh,
75 F.3d 1191, 1196 (7th Cir. 1996); Van Horn v. Trickey, 840
F.2d 604, 606 (8th Cir. 1988); Grant v. Bethlehem Steel Corp.,
823 F.2d 20, 22 (2d Cir. 1987). The court's primary task is to
evaluate the terms of the settlement in relation to the
strength of the plaintiffs' case. See, e.g., Isby, 75 F.3d at
1199. The court should not reject a settlement merely be-
cause individual class members complain that they would
have received more had they prevailed after a trial. See
EEOC v. Hiram Walker & Sons, Inc., 768 F.2d 884, 889 (7th
Cir. 1985); see also United States v. Trucking Employers,
Inc., 561 F.2d 313, 317 (D.C. Cir. 1977).
The dissident members of the class in this case contend
that for a host of reasons the district court abused its
discretion in approving the consent decree as fair. We
conclude, to the contrary, that the settlement is eminently
fair and reasonable to the class as a whole.
First, with respect to the class-wide relief the dissidents
complain that the consent decree does not (1) alter the
Department's allegedly discriminatory assignment system, (2)
give any "relief for retaliatory acts taken by the Depart-
ment," or (3) provide for the expungement of employee
records infected with discrimination. In making the first two
charges the dissidents seem oblivious to the significant mone-
tary, reinstatement, and promotional relief awarded to class
members who claim the Department discriminated or retaliat-
ed against them. Moreover, the injunction prohibits discrimi-
nation in general and in assignments in particular, forbids
retaliation, and prescribes monitoring procedures so that
class counsel can ensure the Department complies. Together
these provisions of the consent decree both redress past and
deter future discrimination in assignments and inhibit future
retaliation. Finally, although the consent decree does not
provide for expungement of employee records potentially
tainted by discrimination, it does require revisions to the
employee evaluation reporting form in order to help prevent
racial discrimination in the future.
Second, the dissidents argue that the consent decree is
inadequate with respect to the compromise of claims regard-
ing discrimination in promotions. While the district court
found no statistically significant evidence of such discrimina-
tion in the junior and senior grades, the plaintiffs did present
statistical evidence suggesting that there had been between
40 and 47 fewer promotions, primarily in the mid-level
grades, than there would have been but for discrimination.
The Department presented its own statistical evidence sug-
gesting that the shortfall was at most 10 promotions. The
district court reasonably determined that in view of the
conflicting evidence, the compromise calling for 17 promotions
was fair and reasonable. Moreover, those who were not
awarded a promotion received monetary compensation for
delays in and denials of promotions.
Relatedly, the court did not abuse its discretion in approv-
ing the provision of the consent decree calling for only one
promotion to be made in the senior grades; there was no
statistically significant evidence of any shortfall of promotions
in those grades. Nor did the district court abuse its discre-
tion when it concluded that the consent decree was fair in
awarding retroactive promotions only to those active FSOs
who had been at their current grade the longest and who had
been recommended for but not granted a promotion. To
determine which individual class members would have been
promoted but for discrimination would have been difficult for
all concerned, wherefore we cannot say that the quick and
dirty alternative upon which the parties settled was unreason-
able. We reject also the dissidents' contention that it was
unfair not to provide any monetary award to those who
received a promotion. A settlement necessitates compromise,
and the agreement that some individuals would get a pro-
motion while others would get cash is not an unreasonable
way to allocate two scarce resources.
Third, the dissidents contend that the consent decree is
insufficient regarding reinstatement. They argue that (1)
four reinstatements was too few; (2) the reinstatements went
only to employees who were terminated when they failed to
get tenure and not to tenured employees who were terminat-
ed for allegedly poor performance; and (3) those who were
reinstated should have received tenured positions rather than
returning as untenured employees. The parties presented
conflicting evidence regarding whether there was a statistical-
ly significant excess in the number of African-American
employees terminated. The Department's expert argued that
employees terminated when they did not get tenure should be
treated separately from tenured employees fired for
performance-related reasons because the two types of ad-
verse decisions are unrelated. Nonetheless, the Depart-
ment's expert opined that terminations of neither tenured nor
untenured African-American employees were significantly
above the norm.
We conclude that the district court properly held both that
four was a reasonable number of reinstatements and that the
agreement limiting reinstatement to those who were termi-
nated for failing to reach tenure was fair in light of the
parties' competing statistical analyses and the risks attendant
to litigation. Further, although the number of reinstate-
ments was limited to four, 29 of the 30 employees who applied
for termination damages received a monetary award. Again,
the dissidents have not shown that this division of the settle-
ment proceeds is unreasonable considering the interests of
the class as a whole. As for the reinstatements being without
tenure, none of the dissidents appears to be among those
reinstated; therefore, the dissidents do not have standing to
pursue this particular objection to the class settlement. See
Pettway v. American Cast Iron Pipe Co., 576 F.2d 1157, 1181
(5th Cir. 1978) ("[A]ppellants who were excluded from the
subclass and denied back pay lack standing to contest the
adequacy of the awards received by other class members").
Fourth, the dissidents appear to complain that they did not
receive sufficient monetary relief. We conclude, however,
that the district court did not abuse its discretion in approv-
ing as fair, adequate, and reasonable the amount of the
damages provided in the consent decree. Class counsel esti-
mated the Department's overall exposure to liability at from
$2.5 million to $4 million while the Department put the figure
at from $725,000 to $1.5 million; each side had reasonable
arguments for its position. Based upon the conflicting evi-
dence and arguments, the risks of litigation, and the time
value of money, the district court reasonably determined that
the $3.8 million upon which the parties had settled was "at
the high end" of what the class could have expected after
trial. The dissidents complain that the settlement "unfairly
limited monetary relief for egregious acts of discrimination to
four persons." The dissidents provide no reason why it was
unfair to award an average of $75,000 in damages to the four
most significantly injured of the terminated class members.
A claim that individual dissenters are entitled to more money
is not, by itself, sufficient to reject the overall fairness of the
settlement; as we indicated above, a settlement necessitates
compromise.
Fifth, the dissidents argue that it was improper for the
court to approve the settlement over the objections of a large
number of class members, including several of the named
plaintiffs. But a settlement can be fair even though a signifi-
cant portion of the class and some of the named plaintiffs
object to it. See Grant, 823 F.2d at 23; Hiram Walker, 768
F.2d at 891-92; Cotton, 559 F.2d at 1331; Flinn v. FMC
Corp., 528 F.2d 1169, 1173 (4th Cir. 1975); cf. Pettway, 576
F.2d at 1215-17 (acknowledging general rule but holding
settlement unfair where approximately 70% of class and all
named plaintiffs objected). Here only 15% of the class
members objected; 85% accepted the settlement, and many
of them actively supported it. The district court did not
abuse its discretion, therefore, in approving the settlement in
spite of some opposition.
The dissidents cite Ficalora v. Lockheed California Co.,
751 F.2d 995 (9th Cir. 1985), and Mandujano v. Basic Vegeta-
ble Products, Inc., 541 F.2d 832 (9th Cir. 1976), for the
proposition that it is an abuse of discretion for a district court
to approve a settlement over the objection of the named class
members. The teaching of those cases, however, is that the
district court must consider the objections raised by the
named plaintiffs. Ficalora, 751 F.2d at 997; Mandujano, 541
F.2d at 836-37. In Mandujano the court also said that the
opposition of a significant number of named plaintiffs "is a
factor to be considered when approving a settlement." 541
F.2d at 837. Here the district court conducted hearings and
permitted all interested parties, including the dissidents, to
testify. The court considered the objections of the plaintiffs
but pointed out that "the best interests of the class as a whole
must remain the paramount consideration even though some
class members believe that they will not receive all the
individual relief to which they believe they are entitled." 169
F.R.D. at 243. The district court's decision is therefore
consistent with the Ninth Circuit cases cited.
Finally, the dissidents argue that class counsel did not act
in the interest of the class when counsel agreed to argue that
the consent decree was fair and not to advocate the right to
opt out, and agreed to the provision of the consent decree
stating that the court may not modify the agreement. In our
view counsel more than adequately represented the class as a
whole. The letter agreement to which the dissidents point
was part of a global compromise between the parties, who
had negotiated their settlement only after significant discov-
ery and under the supervision of a magistrate judge. In view
of the complexity and fragility of such a compromise, the
provision prohibiting the court from modifying the terms of
the agreement is understandable as being in the interests of
both parties; it is not indicative that class counsel acted in
any way at the expense of the class.
In sum, the dissidents complain about particular portions of
the overall settlement and claim that they are individually
entitled to more. It is the obligation of the district court,
however, to evaluate the fairness of the settlement to the
class as a whole. We conclude that the district court did not
abuse its discretion in approving the consent decree as fair,
adequate, and reasonable to the class as a whole.
B. Opting Out
The Department argues that our recent decision in Eu-
banks v. Billington, 110 F.3d 87 (D.C. Cir. 1997), holding that
a court may permit members of a class certified under Rule
23(b)(2) to opt out of the class action and thus retain the right
to sue on their own, is invalid after the still more recent
decision of the Supreme Court in Amchem Products, Inc. v.
Windsor, 117 S. Ct. 2231 (1997). Alternatively, the Depart-
ment contends that under the criteria of Eubanks the district
court abused its discretion in permitting the dissidents to opt
out. We conclude that Amchem does not affect our holding
in Eubanks, but we agree with the Department that under
Eubanks the district court abused its discretion in permitting
the dissidents to opt out.
Rule 23(a) establishes four prerequisites for certifying a
lawsuit as a class action. They are that
(1) the class is so numerous that joinder of all members
is impracticable, (2) there are questions of law or fact
common to the class, (3) the claims or defenses of the
representative parties are typical of the claims or defens-
es of the class, and (4) the representative parties will
fairly and adequately protect the interests of the class.
Rule 23(b) provides for three types of class actions. Sub-
section (b)(1) allows a class action if separate actions would
risk inconsistent adjudications or if individual adjudications
would "be dispositive of the interests of the other members
not parties ... or substantially impair or impede their ability
to protect their interests." Under subsection (b)(2) a class
action may be maintained where
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 correspond-
ing declaratory relief with respect to the class as a whole.
Finally, a subsection (b)(3) class action is appropriate where
the court finds that the questions of law or fact common
to the members of the class predominate over any ques-
tions affecting only individual members, and that a class
action is superior to other available methods for the fair
and efficient adjudication of the controversy.
The requirements of predominance and superiority in subsec-
tion (b)(3) are, of course, additional to the requirements of
subsection (a), which applies to all class actions. The right to
opt out of a subsection (b)(3) class action is expressly provid-
ed in Rule 23(c)(2).
In Amchem the Supreme Court addressed the procedure
for approving a class action settlement. In that case the
parties had simultaneously filed a class action complaint, an
answer thereto, and a settlement agreement. The district
court certified the class action under Rule 23(b)(3) and ap-
proved the settlement. The Third Circuit reversed, holding
that the district court should have evaluated whether to
certify the class just as it would have done if the action were
going to be tried. Georgine v. Amchem Prods., Inc., 83 F.3d
610, 624-26 (1996).
The Supreme Court affirmed the judgment of the court of
appeals although it clarified that "settlement is relevant to a
class certification" in that, if the case is surely going to be
settled, then the "district court need not inquire whether the
case, if tried, would present intractable management prob-
lems." Amchem Prods., Inc. v. Windsor, 117 S. Ct. 2231,
2248 (1997). A "settlement-only class certification" does,
however, depend upon compliance with all the requirements
of Rule 23(a) and (b). The Court made clear that a district
court is to adhere closely to the rule:
[O]f overriding importance, courts must be mindful that
the rule as now composed sets the requirements they are
bound to enforce.
* * *
Federal courts ... lack authority to substitute for Rule
23's certification criteria a standard never adopted--that
if a settlement is "fair," then certification is proper.
Id. at 2248, 2249.
The Department contends that this court's recent decision
in Eubanks was effectively overruled by the Supreme Court's
direction in Amchem that courts are bound to observe strictly
the requirements of Rule 23. Eubanks was a Title VII class
action brought against the Librarian of Congress and certi-
fied under subsection (b)(2). The district court approved the
parties' settlement and held that even if there were a right to
opt out of a subsection (b)(2) class action, the individual
plaintiffs had failed to show that they were entitled to opt out.
Upon appeal we held that, although the district court may in
certain circumstances permit members of the plaintiff class to
opt out of a (b)(2) suit, the court in that case had not abused
its discretion in declining to do so. We recognized that Rule
23 does not "address the possible need for opt-out rights in
non-(b)(3) actions," but we thought the Rule "sufficiently
flexible to afford district courts discretion to grant opt-out
rights in (b)(1) and (b)(2) class actions" in certain circum-
stances. Eubanks, 110 F.3d at 93, 94. We based that ruling
upon Rule 23(d)(5), which specifically authorizes the court to
make "appropriate orders" to govern "procedural matters" in
a class action; subsection (d)(5) is broad enough, we held, to
permit the district court to provide for opt-outs when appro-
priate in (b)(1) and (b)(2) class actions. See id. at 96; see also
Fed. R. Civ. P. 23(d) advisory committee's note (1966) (stating
that subsection (d) "is concerned with the fair and efficient
conduct of the action").
We went on to say that the district court may, when
necessary to the fair and efficient conduct of the litigation,
exercise its discretion to allow opt-outs in at least two ways.
First, if the court finds that "the assumption of cohesiveness"
underlying certification of a (b)(2) class is inapplicable to the
individual class members' claims for monetary damages, then
it may certify a hybrid class action under subsections (b)(2)
and (b)(3)--the latter of which contemplates individual dam-
ages determinations. Eubanks, 110 F.3d at 96. Second, if
the court determines that particular plaintiffs' claims are
"unique or sufficiently distinct from the claims of the class as
a whole," as, for example, where a member of the plaintiff
class had filed his own civil action before the class action was
filed, see, e.g., County of Suffolk v. Long Island Lighting Co.,
907 F.2d 1295, 1304-05 (2d Cir. 1990), then it may permit opt-
outs "on a selective basis." Eubanks, 110 F.3d at 96.
Nothing in the interpretation of Rule 23 we advanced in
Eubanks is inconsistent with the Supreme Court's subsequent
decision in Amchem. The district court's error in Amchem
had been in substituting the fairness inquiry of Rule 23(e) for
the certification requirements of Rule 23(a) and (b). In
Eubanks we did not omit or even relax any requirement of
Rule 23; rather, we held only that in certain limited circum-
stances the district court has discretion under subsection
(d)(5) to permit opt-outs, notwithstanding the absence of a
specific authorization in subsection (b)(2).
In the alternative the Department argues that the district
court abused its discretion by permitting opt-outs because it
did not follow either of the options for doing so outlined in
Eubanks. When the district court issued the decision now
before us, Eubanks had not yet been decided. Relying
instead upon Holmes v. Continental Can Co., 706 F.2d 1144
(11th Cir. 1983), the district court asserted that allowing opt-
outs is appropriate "when the monetary relief stage ... is
functionally more similar to a (b)(3) class than to a (b)(2)
class." 169 F.R.D. at 244. The court was "impressed with
the vehemence with which some members of the class have
opposed the settlement" and noted its "concern" that "in the
absence of allowing for 'opting out' some searing individual
injury might be greatly under compensated." Id. at 245.
We agree that the district court abused its discretion when
it allowed class members to opt out of the settlement in this
case. The district court did not pursue either of the two
options we later approved in Eubanks, nor did it adduce any
other tenable ground upon which opting out might be permit-
ted. Indeed, the dissident plaintiffs do not argue that their
case fits within either of the two circumstances instanced in
Eubanks, nor do they suggest any alternative basis upon
which we can uphold the decision of the district court.
First, the district court clearly did not certify a hybrid class
action based upon a finding that "the assumption of cohesive-
ness for purposes of injunctive relief that justifies certification
as a (b)(2) class is unjustified as to claims that individual class
members may have for monetary damages." Eubanks, 110
F.3d at 96. Class counsel repeatedly requested certification
pursuant to (b)(2), the consent decree stated that the parties
agreed to certification pursuant to (b)(2), and the court ulti-
mately certified the class pursuant to (b)(2). Although the
district court in allowing opt-outs did refer to the distinction
between a (b)(2) and a (b)(3) class action, the court did not
purport to hold, and did not make findings sufficient to
support the conclusion, that a hybrid class certification was
appropriate: The court found neither that the assumption of
cohesiveness underlying a (b)(2) class certification was unjust-
ified with respect to plaintiffs' individual claims for monetary
damages, nor that the monetary or other individual claims
were appropriate for certification under (b)(3). Nor did the
district court address the predominance and superiority re-
quirements for certification under (b)(3). To the contrary,
the court made all the factual findings necessary to show that
a hybrid class was not appropriate. The court determined
that the plaintiffs sought "extensive injunctive and systemic
relief in addition to monetary damages," 169 F.R.D. at 239,
and found that the plaintiffs' "predominantly equitable claims
... arose from a system of personnel actions that have been
uniformly imposed on all class members," id. at 238.
We recognized in Eubanks that whenever individual plain-
tiffs in a subsection (b)(2) class have claims for different
amounts of damages, their interests may begin to diverge.
110 F.3d at 95. As noted above, however, before hybrid
certification is appropriate there must be some reason to
believe that the assumption of cohesiveness underlying a
subsection (b)(2) class action does not apply to the individual
claims for monetary damages; for example, the amounts
claimed by various class members may be so disparate as to
create a conflict of interest within the class. Here the district
court did not find that the assumption of cohesiveness had
broken down; nor do the dissident plaintiffs so argue before
this court.
Second, the district court did not find that the claims of the
individual dissidents are so atypical of the claims of the class
as to justify permitting them to opt out of the class. The
court stated that there might be some class member(s) with a
"searing individual injury" who would be "under compensat-
ed" if limited to the relief provided in the consent decree.
The court did not determine, however, that there are in fact
such persons in the class, let alone that the dissidents are
among them. The dissidents do not even argue that they
have suffered an unusually grave degree of injury; rather,
they argue merely that they stand to be undercompensated
for their injuries. As we made clear in Eubanks, however,
that is not a sufficient justification for permitting members of
the class to opt out:
That ... appellants received less under the settlement
agreement than they might have expected to receive had
they prevailed in individual lawsuits cannot alone justify
an opt-out, as no party can reasonably expect to receive
in a settlement precisely what it would receive if it
prevailed on the merits.
Id. at 98. Moreover, this argument was more properly
directed to the issue of fairness, id. at 98-99, and as such it
was rejected both by the district court in the fairness hearing
and by this court (in Part II.A, above). Nor are the dissi-
dents' claims different in kind from those of other class
members: In certifying the class the court specifically found
that the claims of the named plaintiffs, including eight of the
nine cross-appellants, were "typical" of the claims of the class
as a whole. 169 F.R.D. at 238.
Third, although the district court could properly rely upon
Holmes before we issued Eubanks, it erred in its application
of that case and thereby abused its discretion. See Koon v.
United States, 116 S. Ct. 2035, 2047 (1996) ("A district court
by definition abuses its discretion when it makes an error of
law"). In Holmes the court held that "[t]he presence in the
lawsuit of a significant number of atypical claims not common
to the class" required the district court to permit opt-outs.
706 F.2d at 1155. The court also suggested that the assump-
tion of cohesiveness in Rule 23(b)(2) claims for injunctive
relief may break down when there are individual claims for
disparate amounts of monetary damages and that in such
cases opt-outs may be required. Id. at 1159-60. As we have
pointed out, however, here the district court did not find (and
the dissidents do not contend) that the dissidents' claims are
atypical or that the assumption of class cohesiveness has
broken down.
The dissidents argue, at least implicitly, that they should be
permitted to opt out because several of them had individual
discrimination complaints pending against the Department.
In Eubanks, however, we rejected the contention that a
pending administrative complaint--as opposed to a lawsuit
filed in court--is sufficient to support a class member's
preference to opt out of a class action. See 110 F.3d at 97.
One may not, by first filing an administrative charge and then
affirmatively joining a class action as a named plaintiff or an
intervenor, obtain the option to see whether the result in the
class suit is satisfactory and, if not, then to take up the
administrative charge again.
The dissidents also argue, as they emphasized at oral
argument, that they must be permitted to opt out because
they object to the settlement of their individual claims (as
opposed to the class claims). This is not the law; otherwise
members of the plaintiff class would have to be allowed to opt
out whenever there are individual claims for monetary dam-
ages in addition to class claims for injunctive relief. Eubanks
itself involved claims for injunctive as well as monetary relief,
however, and we upheld the district court's decision not to
permit opt-outs. Insofar as the dissidents mean to suggest
that their individual claims for monetary damages are some-
how unique or atypical, as noted above they give us no reason
to accept that conclusion.
We hold, therefore, that the district court abused its discre-
tion in permitting the dissident class members to opt out of
this class action; the district court made no findings that
would support opting out under Eubanks. Nor is it neces-
sary to remand the case for the district court to make further
findings in light of Eubanks; the Department argued in its
brief that a remand was not necessary, and the dissidents did
not seek a remand to develop the record further in the event
we determined that Eubanks was not satisfied. Moreover,
the dissidents do not allege any alternative basis that, if
proved, would enable the district court upon remand again to
permit them to opt out.
III. Conclusion
For the reasons stated above, we hold that the district
court did not abuse its discretion in approving the fairness of
the consent decree. We also conclude that Amchem does not
undermine this court's holding in Eubanks, and that the
district court abused its discretion in permitting some mem-
bers of the class to opt out of the settlement of this case.
Accordingly, we uphold the district court's approval of the
consent decree and direct that it be made binding upon all
members of the class.
So ordered.