## Facts

- Black job applicants sued Ingersoll International Inc. and related entities under Title VII, alleging a pattern or practice of racial discrimination in hiring.
- Plaintiffs sought class-wide injunctive and declaratory relief and monetary relief, including back pay and compensatory damages authorized by the Civil Rights Act of 1991.
- The proposed class included (1) rejected applicants, (2) persons allegedly discouraged from applying, and (3) employees claiming discriminatory non-promotion or depressed compensation.
- The district court certified a class limited to persons who actually applied and were rejected, and declined to include discouraged applicants or employee promotion/compensation groups.
- The district court certified the rejected-applicant class under Federal Rule of Civil Procedure 23(b)(2).
- Defendants obtained interlocutory review under Rule 23(f) to challenge use of Rule 23(b)(2) for a class seeking substantial money damages.

## Issues

1. Whether a Title VII pattern-or-practice class seeking injunctive relief plus significant individualized monetary damages may be certified under Rule 23(b)(2).
2. If not, what certification structure can address class-wide injunctive issues while preserving procedural protections for individualized damages.

## Decision

- The Seventh Circuit granted Rule 23(f) review, vacated the Rule 23(b)(2) certification order, and remanded.
- Rule 23(b)(2) was held improper where the class seeks more than incidental monetary relief, especially compensatory and punitive damages requiring individualized determinations.
- Because Rule 23(b)(2) lacks mandatory notice and opt-out rights, it cannot be used to bind absent class members on substantial individual damages claims.
- The court directed the district court to reconsider certification using Rule 23(b)(3) for damages, or a hybrid approach (e.g., (b)(2) for injunctive/declaratory relief and (b)(3) for monetary relief).

## Legal Principles

- Rule 23(b)(2) is suited to cases seeking uniform injunctive or declaratory relief; it is not appropriate when individualized monetary damages are a dominant or substantial component of the case.
- After the Civil Rights Act of 1991 introduced compensatory and punitive damages and jury-trial rights under Title VII, many damages claims require individualized proof and defenses and cannot be treated as merely incidental to injunctive relief.
- Due process concerns and the right to a jury trial favor Rule 23(b)(3)—with notice and opt-out rights—when class members pursue substantial individual monetary claims.
- Courts may use bifurcated or hybrid certification to resolve common, class-wide liability issues while ensuring (b)(3) protections for individualized damages determinations.

## Conclusion

The Seventh Circuit held that Title VII class actions seeking significant compensatory and punitive damages cannot proceed solely as mandatory Rule 23(b)(2) classes; instead, damages claims must be handled under Rule 23(b)(3) or a hybrid structure that provides notice and opt-out rights, and the district court’s (b)(2) certification was vacated and remanded for restructuring.


Jefferson v. Ingersoll Int'l Inc., 195 F.3d 894 (7th Cir. 1999)