Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

In 1995 the city gave an examination for positions in its fire department and rated applicants on a scale between highly qualified and not qualified, based on scores. "Qualified" applicants were told that they were unlikely to be hired. From 1996 through 2001, the city hired random batches from the well-qualified pool. In 1997 a person in the qualified pool filed a charge of discrimination, claiming disparate impact on African-American applicants (42 U.S.C. 2000(e)). After receiving right-to-sue letters from the EEOC, applicants filed a class action in 1998. After a trial, the court rejected a business necessity defense and ruled in favor of the plaintiffs. On remand, after the Supreme Court held that most of the claims were timely, the Seventh Circuit affirmed. The city conceded that the cut-off score in the ranking system had a disparate impact, so each "batch" hiring had a similar impact. While hiring according to a list, perhaps hiring highest scorers first, might have served a business necessity, the random selection of batches amounted to repeated "use" of a tool that created disparate impact.

Purchasers of common stock brought a class action alleging violations of federal securities laws; the case settled for $190,000,000. The same underlying facts resulted in an action by employees and former employees under ERISA; the company's 401(k) profit-sharing plan claimed a share of the settlement. The district court rejected the claim and the Seventh Circuit affirmed. Although individual plan participants did not purchase publicly-traded stock, the plan itself did so and is not excluded from the class definition of persons who purchased publicly traded common stock. The definition does, however, exclude any âaffiliateâ of the company and the plan is an affiliate. Plan administrators are either directors of the company or appointed by directors.

Employees filed a class action in Illinois state court, concerning violations of wage and hour laws. The company removed the case, pursuant to the Class Action Fairness Act, 28 U.S.C. 1453(c)(1). The federal district court remanded to state court. The Seventh Circuit reversed, holding that the company presented plausible evidence that the case satisfied the jurisdictional amount in controversy requirement ($5,000,000) and the employees did not demonstrate that it was legally impossible for them to recover that amount.