Friday, October 29, 2010

Judge Baer and Grutter v. Bollinger

Jason Mazzone

Judge Harold Baer Jr. (S.D.N.Y.) is in the news for his efforts to promote diversity among the class action lawyers who appear before him. Last month, in response to a request for approval of a settlement in a class action securities fraud case against Gildan Activewear, Judge Baer issued an order that read in part:
Whereas in order to approve the proposed settlement, the Court must approve, among other things ... the appointment of plaintiffs’ counsel as the Co-Lead counsel for the class...;

And whereas this proposed class includes thousands of participants, both male and female, arguably from diverse backgrounds, and it is therefore important to all concerned that there is evidence of diversity, in terms of race and gender, in the class counsel I appoint ... it is hereby

Ordered that Co-Lead Counsel, Robbins Geller Rudman & Dowd LLP and Labaton Sucharow LLP, shall make every effort to assign to this matter at least one minority lawyer and one woman lawyer with requisite experience.

This was not the first case in which Judge Baer specified racial and gender requirements for lawyers in class actions. The above order cited Judge Baer’s 2007 opinion certifying a class in an ERISA suit against JP Morgan. In that case, Judge Baer wrote:

The proposed class includes thousands of [retirement plan] . . . participants, both male and female, arguably from diverse racial and ethnic backgrounds. Therefore, I believe it is important to all concerned that there is evidence of diversity, in terms of race and gender, of any class counsel I appoint. A review of the firm biographies provides some information on this score. Here, it appears that gender and racial diversity exists, to a limited extent, with respect to the principal attorneys involved in the case. Co-lead counsel has met this Court’s diversity requirement-i.e., that at least one minority lawyer and one woman lawyer with requisite experience at the firm be assigned to this matter.

[In re J.P. Morgan Chase Cash Balance Litigation, 242 F.R.D. 265, 277 (SDNY 2007)]

As in the order last month, in justifying this “diversity requirement” in the JP Morgan case, Judge Baer invoked Rule 23(g) of the Federal Rules of Civil Procedure. It lists factors that a court must take into account in appointing class counsel: the lawyer’s experience, knowledge of the law, resources, and so on. Rule 23(g) then provides that in appointing counsel the court “may consider any other matter pertinent to counsel’s ability to fairly and adequately represent the interests of the class.” Because the class contains women and racial minorities, Judge Baer reasoned, women and minority lawyers are needed to ensure the class is represented.

(The opinion in the JP Morgan case doesn’t make clear whether the law firm by itself had met the diversity requirement—or whether it did so because Judge Baer told it to add women and minority lawyers. Nonetheless, the class is certified and the diversity requirement is not tested on appeal.)

In an interview published yesterday in the New York Law Journal, Judge Baer said that, given the discretion that Rule 23(g) gives to judges, he saw no reason why diversity could not be taken into account.

I see a reason: the Constitution.

If Rule 23(g) really did authorize a judge to take account of the race (or gender) of lawyers in certifying class counsel, the Rule would likely be unconstitutional. There is only one context in which the Supreme Court has held that, consistent with the Constitution’s equal protection requirements, the government may take account of an individual’s race in order to promote diversity: admission of students to universities. Grutter v. Bollinger (2003), involving a challenge to affirmative action at the University of Michigan Law School, held that government is allowed to pursue the compelling interest in obtaining the educational benefits that flow from a diverse university student body through an admissions process, geared to promoting multiple forms of diversity, that takes account of an applicant’s race as part of a holistic review of the applicant’s file.

Class action litigation is not higher education. It is difficult to see how government would have a compelling interest (or even an important interest, the standard for gender classifications) in promoting diversity among the lawyers appointed to represent a class of litigants. Even if ensuring some level of performance by class action lawyers is a compelling (or important) government interest (rather than just a rational interest), such an interest has little or nothing to do with the demographic characteristics of the lawyers themselves.

(Consider also the desirability of federal judges looking up lawyers on websites to determine--like the train conductors in Plessy v. Ferguson--their race and gender.)

In the New York Law Journal interview, Judge Baer invoked an additional reason for his approach: giving members of racial minority groups and women greater courtroom experience. It is equally doubtful that that’s an interest that rises to the level of a compelling (or important) government interest and there are surely ways for the government to pursue any such interest besides the use of a lawyer’s race (or gender).

The canon of constitutional avoidance applies here: Rule 23(g) should be construed not to authorize consideration of a lawyer’s race or gender in order to avoid an obvious constitutional problem.

There is a certain irony to Judge Baer’s invocation of diversity in the Rule 23(g) context for Judge Baer ends up inadvertently casting doubt on the legitimacy of Grutter itself.

Grutter’s holding was premised on the claim, made by the government and by a long list of amici, that diversity provides educational benefits to every law student and that this, in turn, benefits the entire society. Accepting this argument, the Grutter Court stated:
As the District Court emphasized, the Law School’s admissions policy promotes “cross-racial understanding,” helps to break down racial stereotypes, and “enables [students] to better understand persons of different races.” These benefits are “important and laudable,” because “classroom discussion is livelier, more spirited, and simply more enlightening and interesting” when the students have “the greatest possible variety of backgrounds.”

The Law School’s claim of a compelling interest is further bolstered by its amici, who point to the educational benefits that flow from student body diversity. In addition to the expert studies and reports entered into evidence at trial, numerous studies show that student body diversity promotes learning outcomes, and “better prepares students for an increasingly diverse workforce and society, and better prepares them as professionals.”

These benefits are not theoretical but real, as major American businesses have made clear that the skills needed in today’s increasingly global marketplace can only be developed through exposure to widely diverse people, cultures, ideas, and viewpoints.

If the claim about broad educational benefits made to the Court in Grutter was correct, then there should be no need under Rule 23(g) to ensure class action lawyers match the racial and other characteristics of the class members. Lawyers who have been trained in a Grutter-endorsed law school should already have the requisite skills to understand, interact with, and properly represent people unlike themselves. The whole point of Grutter was to enable law schools to ensure its graduates have these qualities. On the other hand, if, as Judge Baer reasons, lawyers do not have these qualities, then the key justification for consideration of race by law school admissions offices vanishes.

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