United States District Court, S.D. New York
Opinion Granting Motion To Certify Appeal Granted Jan. 28, 2013.
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
Barbara J. Olshansky, Stanford Law School Center for Internet & Society, Stanford, CA, Joshua Samuel Sohn, DLA Piper U.S. LLP, New York, NY, for Plaintiffs.
Bryan David Glass, New York State United Teachers, Eamonn F. Foley, The New York City Law Department, New York, NY, for Defendant.
OPINION & ORDER
WOOD, District Judge.
Plaintiffs, who represent a class of African-American and Latino teachers in the New York City public school system, brought the above-captioned action in 1996. Plaintiffs allege that the Board of Education of the City School District of the City of New York (" the Board" ), currently a Defendant, and former Defendant the New York State Education Department (" SED" ) discriminated against Plaintiffs in violation of Title VII of the Civil Rights Act of 1964 (" Title VII" ), as amended, 42 U.S.C. § 2000e et seq. Specifically, Plaintiffs claim the Board engaged in discrimination by requiring Plaintiffs to pass certain standardized tests— the National Teacher Core Battery exam (" Core Battery exam" ) and the Liberal Arts and Sciences Test (" LAST" ), the successor to the Core Battery exam— in order to be licensed to teach in New York City public schools. In 2001, Judge Constance Baker Motley, before whom this case was originally pending, certified the class pursuant to Federal Rules of Civil Procedure 23(a) and 23(b)(2).
In 2003, after five month bench trial, Judge Motley entered judgment in favor of the Board and SED, finding that their use of the Core Battery exam and the LAST did not violate Title VII. In 2006, the Second Circuit Court of Appeals vacated the District Court's judgment with respect to the LAST, and remanded the case. The Second Circuit also dismissed all claims against SED, leaving the Board as the sole defendant. While the case was pending before the Court on remand, the Board moved to decertify the class in light of the Supreme Court's decision in Wal-Mart Stores, Inc. v. Dukes, --- U.S. ----, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011).
This Opinion (1) first considers the Board's decertification motion, and then addresses the three remaining post-remand issues pertaining to the Board's Title VII liability: (2) whether the Board can be subject to Title VII liability for its use of the LAST; (3) whether the Board violated Title VII by requiring Plaintiffs to pass the LAST in order to receive a teaching license; and (4) whether the Board violated Title VII by reducing Plaintiffs' salaries, benefits, and seniority if they failed to pass the Core Battery exam and the LAST.
For the reasons set forth below, the Court holds that: (1) the Board's decertification motion should be granted— and the
class decertified— with respect to all of Plaintiffs' requests for relief except a declaratory judgment as to the Board's liability under Title VII and injunctive relief benefitting the class as whole; (2) the Board can be subject to Title VII liability for its use of the LAST; (3) the Board violated Title VII by requiring Plaintiffs to pass the LAST because it was not properly validated; and (4) the Board did not violate Title VII by reducing Plaintiffs' salaries, benefits, and seniority if they failed to pass the Core Battery exam.
A. Licensing of New York City Teachers
In order to teach in New York State's public school systems, teachers must be certified by the state. Trial Tr. 1668-69. SED, which supervises the state public school system, is responsible for state certification of teachers. Until 1991, the Board was responsible for setting licensing requirements for teachers in the New York City (" City" ) school system. Although the State and the City used different terminology (" certificate" versus " license" ), both State certification and City licensing serve the same purpose: to ensure that new teachers met certain requirements, primarily with respect to education and experience, deemed necessary for successful teaching. In order to comply with state law, City licensing standards had to be " substantially equivalent" to state certification standards. Bd. Ex. N. This meant that the Board had to adopt any certification requirements imposed by SED. Trial Tr. 230-33. SED reviewed and approved the licensing requirements set by the Board to ensure equivalence. Bd. Ex. N; Trial Tr. 243-44, 1005, 1725.
City teachers could receive conditional teaching licenses if they passed a licensing exam and met certain minimal requirements. A conditional license lasted for five years and became a permanent license if the teacher met additional licensing requirements within those five years. Trial Tr. 230, 238, 868; Pls. Ex. 1. A teacher with a conditional license could teach full time in a City public school; after a probation period, the teacher received tenure, with a higher salary and more generous benefits and seniority rights. Pls. Ex. 1. If, however, the teacher failed to meet the requirements for a permanent license within five years, her conditional license could be revoked. Pls. Ex. 1. Once the conditional license was revoked, the teacher could teach only as a substitute; substitutes were permitted to meet less stringent licensing requirements. Pls. Ex. 1. Because of teacher shortages, many substitute teachers worked full time; however, substitute teachers had lower salaries, fewer benefits, and no seniority rights. SED Ex. 58(c).
In 1984, SED issued a new regulation that required teachers to pass the Core Battery exam in order to receive state certification. SED Ex. 17. The Core Battery exam was a set of standardized tests
that measured teachers' communication skills; general knowledge of social studies, math, science, literature, and the fine arts; and knowledge of pedagogy. Gulino v. Bd. of Educ. of the City Sch. Dist. of the City of N.Y., No. 96 Civ. 8414, 2003 WL 25764041, at *13 ¶ 69 (S.D.N.Y. Sept. 4, 2003) (Motley, J.) (" Gulino III " ).
Around the time that SED introduced the Core Battery exam, SED informed the Board that, in order for City licensing standards to be equivalent to state standards, City teachers must also pass the Core Battery exam. Trial Tr. 1006-07, 2349, 3483-84. SED and the Board agreed, however, that the Board could phase in the Core Battery exam requirement gradually: beginning in 1985, City teachers would be required to pass the Core Battery exam in order to receive a permanent license; eventually, the Board would make the Core Battery exam a requirement to obtain a conditional license. Pls. Ex. 30; 31. City teachers who received permanent licenses prior to 1985 were not required to take the exam. SED Ex. 17.
Under this plan, the Board continued to issue conditional licenses to teachers who had not passed the Core Battery exam, and, because of teacher shortages and administrative problems, the Board gave many teachers with conditional licenses more than five years to pass the Core Battery exam. Pls. Exs. 1, 273. Many teachers, therefore, were able to continue teaching in fulltime, non-substitute positions with a conditional license, even though they did not satisfy the permanent licensing requirements (including passing the Core Battery exam) within five years.
In 1991, the New York State legislature passed a new law standardizing licensing requirements across the state, including a mandate that all New York teachers— including City teachers— obtain state certification. SED Ex. 58(c). Pursuant to this law, the Board could not issue a conditional license until the teacher obtained state certification, which required passing the Core Battery exam. Trial Tr. at 925. Teachers who had not passed the Core Battery exam could still teach in full-time, non-substitute positions by obtaining a state temporary license, Trial Tr. 925-26, which could be renewed yearly for up to three years, or longer in certain circumstances. Trial Tr. 889. Even after the 1991 law came into force, teachers who obtained conditional licenses prior to 1991 could continue teaching with those licenses, subject, as before, to the condition that they pass the Core Battery exam within five years. Trial Tr. 242-44.
To ensure compliance with the 1991 law, SED pressured the Board to enforce the Core Battery exam requirement and to revoke the conditional and temporary licenses of teachers who had not passed the exam within five years. Trial Tr. 979-80, 2350. Accordingly, after 1991, the Board began informing delinquent teachers that their conditional or temporary licenses would be revoked if they did not pass the Core Battery exam by a certain date. Many teachers who were unable to pass the Core Battery exam subsequently lost their conditional and temporary licenses, and could work only as substitutes. Due to continuing teacher shortages, however, many of these substitutes remained in the same classrooms and continued to teach full time, but at a lower salary, with a reduced benefit level, and without seniority.
Beginning in 1993, SED phased out the Core Battery exam and phased in the LAST, a new test developed by a professional test development company, National Evaluation Systems (" NES" ). Trial Tr. at 2316. It was one of several new requirements to obtain a permanent teaching license, which also included requiring teachers to obtain a master's degree, gain two
years of teaching experience, and pass content-specific tests. Trial Tr. At 1710-2315.  From that point forward, most new teachers were required to pass the LAST in order to obtain state certification or a conditional license, and teachers with a conditional license had to pass either the Core Battery exam or the LAST in order to receive a permanent license. Trial Tr. at 2316. By 1996, SED had completely eliminated the Core Battery exam, and all teachers had to pass the LAST in order to be licensed to teach in New York.
B. Procedural History
Plaintiffs represent a class of African-American and Latino teachers who were teaching in City public schools with temporary or conditional licenses (" experienced teachers" ), but were unable to obtain permanent licenses or had their licenses revoked because they could not pass the Core Battery exam or the LAST. Gulino v. Bd. of Educ. of the City Sch. Dist. of the City of N.Y., 201 F.R.D. 326, 330 (S.D.N.Y.2001) (Motley, J.) (" Gulino I " ). Plaintiffs brought this action against SED and the Board in 1996, pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. Title VII prohibits an employer from requiring job applicants to pass an employment exam that: (1) has a disparate impact on a protected class, and (2) is not " job related," meaning that the exam does not have a " manifest relationship to the employment in question." See 42 U.S.C. 2000e-2(a)(1); Albemarle Paper Co. v. Moody, 422 U.S. 405, 425, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975). Plaintiffs alleged that: (1) the LAST and Core Battery exam had a disparate impact because Caucasian test-takers passed the exams at statistically significantly higher rates than African-American and Latino test-takers; and (2) the exams were not job related because they did not measure whether experienced teachers such as Plaintiffs were qualified to teach. Accordingly, Plaintiffs claimed that the Board and SED violated Title VII by requiring Plaintiffs to pass the Core Battery exam and the LAST in order to receive permanent licenses, and by revoking Plaintiffs' temporary or conditional licenses and reducing their salaries, benefits, and seniority for failing to pass. Plaintiffs sought three types of relief: monetary relief in the form of backpay; a declaratory judgment as to Defendants' liability; and injunctive relief, including the appointment of a monitor to ensure that the current version of the LAST did not violate Title VII, and an award of licenses and seniority rights to teachers who were denied them because of their performance on the LAST.
1. Initial District Court Proceedings
This case was originally assigned to the Honorable Constance Baker Motley. In 2002, after extensive discovery, Defendants moved for summary judgment. SED argued that it was not subject to Title VII because it was not Plaintiffs' employer, and the Board argued that it could not be held liable under Title VII because it was following the mandates of state law when it required teachers to pass the Core Battery exam and the LAST in order to receive a license. Judge Motley denied both of these motions, and held that SED was an employer for the purposes of Title VII. She then held that the Board could be liable under Title VII, regardless of whether it was following state law, because (1) the Board, not SED, had decertified teachers who failed to pass the Core Battery exam and the LAST; and (2) Title VII preempts any state laws in conflict with it. See
Gulino v. Bd. of Ed. of City Sch. Dist. of N.Y., 236 F.Supp.2d 314, 332-37 (S.D.N.Y.2002) (Motley, J.) (" Gulino II " ).
The case proceeded to " an epic bench trial that lasted more than eight weeks and filled over 3,600 pages of trial transcript." Gulino III, 2003 WL 25764041, at *1. In 2003, following the trial, Judge Motley ruled that SED and the Board had not violated Title VII by requiring teachers to pass the Core Battery exam or the LAST in order to receive a permanent license. Id. at *30-31 ¶¶ 161-64. Although Judge Motley held that Plaintiffs had established a prima facie case of disparate impact, id. at *30 ¶ 160, she ultimately found that the Board and SED were not liable under Title VII because the evidence proved that both exams were job related, a defense to Plaintiffs' showing of disparate impact. Id. at *30-31 ¶¶ 161-63 (citing Albemarle Paper, 422 U.S. at 425, 95 S.Ct. 2362).
Judge Motley held that two alternative standards existed to determine whether an employment exam is job related. Under the first standard, an exam is job related if the exam is properly " validated." Gulino III, 2003 WL 25764041, at *30 ¶ 161. Validation requires a showing " by professionally acceptable methods, [that the exam is] ‘ predictive of or significantly correlated with important elements of work behavior which comprise or are relevant to the job or jobs for which candidates are being evaluated.’ " Albemarle Paper, 422 U.S. at 431, 95 S.Ct. 2362 (quoting 29 C.F.R. § 1607.4(C)). In the Second Circuit, validation is assessed using a five-part test established in Guardians Ass'n v. Civil Service Commission of New York, 630 F.2d 79 (2d Cir.1980). Judge Motley drew the second standard from the Supreme Court's decision in Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 108 S.Ct. 2777, 101 L.Ed.2d 827 (1988), and found that an employment exam is job related if it is " manifestly related to legitimate employment goals." Gulino III, 2003 WL 25764041, at *30 ¶ 162.
Applying the Guardians test, Judge Motley held that Defendants had proven that the Core Battery exam was properly validated, and thus was job related. Id. at *30 ¶ 161. However, Judge Motley held that the LAST was not properly validated under the Guardians standard; there was insufficient documentary evidence in the record regarding validation of the LAST; and, because of this " pervasive lack of documentation," Defendants had not met their burden of proving validation. Id. at *29 ¶ 153. However, applying the alternative Watson standard, Judge Motley held that the LAST was " manifestly related to legitimate employment goals" and thus was job related. Id. at *31 ¶ 163.
2. Second Circuit Proceedings
The parties cross-appealed Judge Motley's rulings. Defendants appealed Judge Motley's decision that they could be subject to Title VII liability. SED renewed its argument that it was not an employer for the purposes of Title VII. Gulino v. N.Y. State Educ. Dep't, 460 F.3d 361, 372 (2d Cir.2006) ( " Gulino IV " ). The Board, however, abandoned its prior argument that it could not be held liable under Title VII because it was following state law when it required teachers to pass the LAST. Id. at 380. Instead, the Board contended that it could not be subject to Title VII liability because it was acting as a licensor, not an employer, when it licensed Plaintiffs to teach in City schools. Because Title VII does not apply to licensors, the Board argued, it was not subject to liability. Id.
Plaintiffs appealed Judge Motley's ruling that the LAST was job related. 
Id. at 381. Plaintiffs also argued that Judge Motley had failed to address their argument that the Board " misused" the Core Battery exam and the LAST by requiring experienced teachers like Plaintiffs to take the exams, and demoting them to substitute positions if they failed. Pls. Ex. H at 57-61; Gulino IV, 460 F.3d at 370. Plaintiffs argued that, to the extent the Core Battery exam and the LAST were properly validated, they were validated for use only in licensing new teachers who had not yet entered a classroom. Plaintiffs argued that the Board should not have required experienced teachers to pass the Core Battery exam and the LAST, and that this " misuse" of the exams violated Title VII. Id.
The Second Circuit issued its opinion in 2006. First, the Second Circuit dismissed all claims against SED, finding that it was not an " employer" within the meaning of Title VII. Gulino IV, 460 F.3d at 379-80. With respect to the Board, however, the Second Circuit decided that Title VII did apply because the Board was both a licensor and Plaintiffs' employer, and employers are subject to Title VII. Id. at 380-81. Although the Board had not renewed its argument that it could not be liable because it was following state law, the Second Circuit nonetheless found that Judge Motley was correct to reject this argument on summary judgment because Title VII preempts conflicting state laws. Id. at 380.
Finally, the Second Circuit held that Judge Motley had erred in finding that the LAST was job related. The Second Circuit disagreed with Judge Motley's reading of Watson, and held that the only standard for determining whether an employment exam is job related is whether the test was validated, assessed using the five-part Guardians test. Gulino IV, 460 F.3d at 385-86. The Second Circuit also found several factual errors in Judge Motley's analysis, including her focus on the essay portion of the test. Id. at 387. Finally, the Second Circuit questioned Judge Motley's finding that there was " a pervasive lack of documentation" in the case, and noted that a defendant need not present documentary evidence of the validation process in order to prove that an exam was properly validated; rather, testimony from those involved in the validation process and " studied opinions of certified experts" could also prove that the LAST had been properly validated. Id. at 387-88. Accordingly, the Second Circuit remanded the case to determine in the first instance whether the LAST was job-related under the Guardians test using these evidentiary guideposts. Id. at 388. The Second Circuit also directed the District Court to address Plaintiffs' " misuse" argument. Id. at 370 n. 9.
3. Current Proceedings
On remand, the case was reassigned to Judge Sydney H. Stein, and then transferred to this Court in February 2009. In December 2009, the Court ordered the parties to brief the two issues remaining on remand: (1) whether the LAST was properly validated, and thus job related; and (2) whether the Board misused the LAST and the Core Battery exam to make decisions regarding the conditions of Plaintiffs' employment. See Order dated Dec. 8, 2009 (Dkt. 241). Along with their briefs, the parties submitted all relevant trial evidence for the Court's review. (Dkt. 247; Dkt. 276; Dkt. 253). SED, although no longer a party to the case, submitted an amicus brief arguing that the LAST was properly validated. Remand Mem. by Amicus Curiae N.Y. State Educ. Dep't (Dkt. 251) (" SED Remand Mem." ); see also Order dated Sept. 17, 2009, 2009 WL 2972997, (Dkt. 237) (denying SED's motion to intervene but allowing it to participate as amicus curiae ).
In August 2010, the Court requested additional briefing on the Board's involvement in developing the LAST; what information the Board had about the development and administration of the LAST; and what action the Board could have taken if it suspected the LAST violated Title VII. See Order dated Aug. 13, 2010 (Dkt. 294). Plaintiffs, the Board, and SED (as amicus ) all submitted supplemental briefs addressing these issues. (Dkt. 299; Dkt. 302; Dkt. 304). The parties also addressed what effect, if any, the Supreme Court's holding in Ricci v. DeStefano, 557 U.S. 557, 129 S.Ct. 2658, 174 L.Ed.2d 490 (2009), had on the pending issues.
In these briefs, the Board and SED argue that (1) the LAST is not subject to challenge under Title VII because it is a licensing test, not an employment test; and (2) the Board was mandated by state law to use the LAST, and following state law is a " business necessity" that exempts the Board from Title VII liability. The Court notes that it did not ask the Board and SED to brief these issues on remand. However, because the Court understands the importance of these issues, it addresses them in this Opinion.
In July 2011, while the issues on remand were still pending, the Board moved to decertify the class based on the Supreme Court's decision in Wal-Mart Stores, Inc. v. Dukes,
__ U.S. __, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011).
For the reasons set forth below, the Court finds that: (1) the Board's decertification motion should be granted— and the class decertified— with respect to all of Plaintiffs' requests for relief except a declaratory judgment as to the Board's liability under Title VII and injunctive relief benefiting the class as whole; (2) the Second Circuit has established that the LAST may be challenged under Title VII and that the Board is subject to Title VII liability; (3) the Board violated Title VII because the LAST was not properly validated; and (4) the Board did not misuse the Core Battery exam to make decisions regarding the conditions of Plaintiffs' employment. Based on these findings, the Court holds that the Board violated Title VII by requiring Plaintiffs to pass the LAST in order to receive a permanent license.
II. CLASS CERTIFICATION ISSUE
Before considering the merits of Plaintiffs' Title VII claims, the Court must first address the Board's motion to decertify Plaintiffs' class in light of Wal-Mart Stores, Inc. v. Dukes,
__ U.S. __, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011) (" Wal-Mart " ). For the following reasons, the Court grants in part and denies in part the Board's motion to decertify the class.
A. Class Certification Order
In 2001, pursuant to Rule 23, Plaintiffs sought to certify the class, defined as " All African-American and Latino individuals employed as New York City public school teachers by Defendants, on or after June 29, 1995, who failed to achieve a qualifying score on either the [Core Battery exam] or the LAST, and as a result either lost or were denied a permanent teaching appointment." Gulino I, 201 F.R.D. at 330.Rule 23 stipulates that a class action may be maintained only if the action satisfies the requirements of Rule 23(a) and at least one subsection of Rule 23(b). Judge Motley certified the class pursuant to Rules 23(a) and (b)(2).
Judge Motley held that the four requirements of Rule 23(a)— numerosity, commonality, typicality, and adequacy of representation— were satisfied because, respectively: (1) the approximately 2,000-member class was numerous enough to render joinder impractical; (2) the class members had in common the legal question " at the heart of this suit" — that is,
whether Defendants' use of the Core Battery exam and the LAST had a disparate impact on African-American and Latino teachers; (3) Plaintiffs' claims were typical of the other class members, especially in light of the fact that all members would necessarily benefit from any injunctive relief requiring Defendants to cease using the LAST; and (4) the interests of Plaintiffs and the class members were sufficiently aligned, and class counsel was adequately qualified and experienced to conduct the representation, such that Plaintiffs fairly and adequately protected the interests of the class. Gulino I, 201 F.R.D. at 331-33.
Judge Motley then determined that the class should be certified under Rule 23(b)(2), which is satisfied where " the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole." Fed.R.Civ.P. 23(b)(2). Judge Motley held that Rule 23(b)(2) was invoked appropriately because Plaintiffs sought to enjoin Defendants from using the LAST to engage in an alleged pattern of discriminatory conduct that caused injury to the entire class. Gulino I, 201 F.R.D. at 333. Judge Motley further noted that " [w]here injunctive relief and damages are sought under Rule 23(b)(2), the injunctive relief must be the predominant issue," id., and found that, because Plaintiffs had dropped their claims for compensatory and punitive damages, their " remaining claims for monetary relief [in the form of backpay] do not predominate over [their] claims for injunctive and declaratory relief." Id. at 334.
The Board, joined by SED as amicus curiae, now moves to decertify the class based on Wal-Mart, arguing that the Supreme Court's holding that individualized claims may not be certified under Rule 23(b)(2) precludes Plaintiffs from maintaining their class certification under that provision. Def. Letter dated July 8, 2011, at 2 (Dkt. 306).
B. Legal Standard
Pursuant to Rule 23(c)(1)(C), " [a]n order that grants or denies class certification may be altered or amended before final judgment." Fed.R.Civ.P. 23(c)(1)(C); see also Boucher v. Syracuse Univ., 164 F.3d 113, 118 (2d Cir.1999) (" [U]nder Rule 23(c)(1), courts are required to reassess their class rulings as the case develops." (internal quotation omitted)). A court is permitted to " decertify a class if it appears that the requirements of Rule 23 are not in fact met." Sirota v. Solitron Devices, Inc., 673 F.2d 566, 572 (2d Cir.1982). However, a court " may not disturb its prior findings absent some significant intervening event or a showing of compelling reasons to reexamine the question." Doe v. Karadzic, 192 F.R.D. 133, 136-37 (S.D.N.Y.2000) (Leisure, J.) (internal quotation and citations omitted). ...