PUFFER v. ALLSTATE INSURANCE CO. (March 27, 2012)
Katherine Puffer worked at Allstate Insurance Company for over 25 years. She was terminated in 2003 as part of a reduction in force. She filed a charge with the EEOC and later a complaint in federal court alleging gender discrimination and retaliation. Her complaint alleged three claims: a) a class claim that Allstate had a "policy or practice" of discriminating against a class of female managerial employees because of their gender, b) a class claim that Allstate paid a class of women lower wages for the same work as men, and c) individual claims of retaliation and Equal Pay Act violations. The first class claim was alleged under both "differential treatment" and "disparate impact" Title VII theories. Magistrate Judge Schenkier (N.D. Ill.) denied class certification. He focused almost exclusively on the differential treatment theory, relegating the disparate impact theory to a footnote. He found that the class failed to satisfy either the commonality or typicality requirement and also concluded that Puffer failed to show that certification was proper under Rule 23 (b)(2) or (b)(3). In doing so, he discounted plaintiff's expert's statistical analysis because it was contrary to the then-recently decided Ledbetter case. Puffer again sought certification after the President signed the Ledbetter Act. The memorandum focused exclusively on a "pattern-or-practice" claim even though she used the term "disparate impact" in her motion. Magistrate Judge Schenkier again denied her motion. Puffer settled her individual claims and several putative class members moved to intervene and appeal.
In their opinion, Seventh Circuit Judges Flaum and Tinder and District Judge Shadid affirmed. The Court noted that, in light of the Supreme Court's decision in Dukes, the plaintiffs did not appeal from the denial of certification for the pattern-or-practice count. They appeal only the Title VII disparate impact claim. The Court explained some differences. A disparate impact claim does not require proof of intentional discrimination. Rather, it focuses on facially neutral treatment that has a more burdensome impact on one group than other. A pattern-or-practice claim, on the other hand, is a claim based on intentional discrimination. Here, the Court concluded that the intervenors stand in the same shoes as the plaintiff and the plaintiff failed to present a disparate impact theory in the district court. The Court cited numerous instances where plaintiff focused her argument on a pattern-or-practice case and not a disparate impact case, including the fact that she did not cite any disparate impact cases in her class certification memorandum. The fact that she mentioned, on a few occasions, that she was alleging both is not enough to avoid waiver. Given that the intentional discrimination claim was the only one adequately argued and the only one decided by the court, it is the only one preserved for appeal – and it was not appealed. The disparate impact claim has been waived.