2d Cir: Ricci not bar disparate impact claim

In a lawsuit arising from the aftermath of Ricci v. DeStefano, 129 S. Ct. 2658 (2009), the Second Circuit reversed the dismissal of a lawsuit by an individual who was not a party to Ricci, involving the same promotional examination at issue in Ricci.  Briscoe, an African-American firefighter, alleged that 2003 test violated Title VII due to a disparate impact on minorities.  The appellate court held that Briscoe’s claim was not barred by the Ricci decision.  Briscoe v. City of New Haven, Civ. No. 10-1975, 2011 WL 3560001 (2d Cir. Aug. 15, 2011). Chief Judge Dennis Jacobs, a George H.W. Bush nominee, wrote the opinion, joined by Winter (Reagan) and Cabranes (Carter).

In Ricci v. DeStefano, the City of New Haven refused to certify the results of a test issued to firefighters to assess whether they would be promoted, because the city believed that the test had an unlawful disparate impact on minority candidates. Ricci held that the city’s refusal to certify the test results constituted disparate treatment under Title VII.  The Court stated that the city would not be subject to disparate treatment liability if it had a “strong basis in evidence” to conclude that it would have faced disparate-impact liability if it had certified the results. Id. at 2671, 2677.  However, instead of allowing the city to have an opportunity to satisfy the newly imposed “strong basis in evidence” standard, the Court ordered the city to certify the results. Id. at 2677, 2681. In response to the certification, Michael Briscoe brought a disparate-impact lawsuit against the city.

While the city had successfully advanced a preclusion theory in the district court, the city abandoned its preclusion argument on appeal. Nonetheless, the Second Circuit briefly addressed the issue. Congress created a way by which non-party Title VII litigants can be bound by a judgment.  When the district court holds a fairness hearing regarding a consent judgment or order, non-litigants can be provided notice and an opportunity to present objections.  42 U.S.C. § 2000e–2 (n)(1). But Briscoe was not provided with this notice, since the district court granted summary judgment to the city.  Therefore, Briscoe did not have a “reasonable opportunity” to object to the Ricci judgment.

The court next addressed the city’s argument that an employer can defeat a disparate-impact claim if it has a “strong basis in evidence” to believe that it would have been liable for disparate treatment. The Second Circuit explained that Ricci’s holding is expressly limited to disparate-treatment claims, and that, as a consequence, its holding does not alter the contours of disparate-impact claims. More specifically, while the Supreme Court in Ricci held that an employer could avoid disparate-treatment liability if it has a “strong basis in evidence” to conclude that its discriminatory action would lead to disparate-impact liability, the Second Circuit explained that Ricci’s holding does not extend to the converse situation where an employer could avoid disparate-impact liability if it has a “strong basis in evidence” that another course of action would have subjected it to disparate-treatment liability. The court reasoned that Ricci’s “precise formulation of its holding (corroborated elsewhere in the majority opinion, and by concurring and dissenting opinions) supersedes any dicta arguably to the contrary.”

The court stated that the statutory definition of “disparate impact” answers the corresponding question of whether disparate-impact liability could be avoided due to concerns about disparate-treatment liability. The court noted that under 42 U.S.C. § 2000e –2(k)(1), if an employer’s conduct is “job related” and “consistent with business necessity,” the conduct cannot open the employer up to disparate-impact liability. Also, the court noted that because the contours of disparate-impact claims are largely statutory, it would expect that any holding that was meant to change the contours of disparate-impact claims would discuss the relevant statutes, which Ricci did not.

Moreover, the court stated that it would be difficult to establish a “strong basis in evidence” standard for disparate treatment claims. Citing an earlier Second Circuit case, the court explained that “[u]nlike disparate-treatment liability, in which intent is a core consideration and for which consistent standards are simply impractical, disparate-impact liability involves quantitative metrics that resonate with an objective ‘strong basis in evidence’ standard.” See Gulino v. N.Y. State Educ. Dep’ t, 460 F.3d 361, 382 (2d Cir.2006).

The court ended its opinion by suggesting that an employer can avoid the problem of recurring litigation in two different ways. First, an employer could seek to join all interested parties as required parties. See Fed.R.Civ.P. 19. Second, an employer could move, prior to a motion for summary judgment or dismissal, for notice to non-parties as permitted by the statute.  42 U.S.C. § 2000e–2(n).

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