After Dukes, many commentators bemoaned that the class action was dead. At the very least, many argued (as did some last week at DePaul Law School’s Symposium on Class Action Rollback) that the Title VII class action is likely on its last legs.

If so, no one told the plaintiffs’ counsel prosecuting McReynolds v. Merrill Lynch, Pierce Fenner & Smith (7th Cir. 2012), where the Seventh Circuit just reversed denial of a class seeking injunctive relief and certification of a class for the purpose of determining whether disparate-impact discrimination had occurred against African-American brokers.

The case bears some superficial similarities to Dukes. The plaintiffs alleged racial discrimination, and sought injunctive relief. But, unlike the Dukes plaintiffs, they alleged only disparate-impact discrimination (which does not require proof of intent, and does not allow recovery of damages), and did not seek back-pay as relief, at least at this stage. (Earlier iterations of the class proposal did.)

The lower court denied plaintiffs’ class certification proposal several times. However, in denying certification of plaintiffs’ most recent class proposal, the district court had said that the question of whether it could, at the very least, certify a class solely to determine whether there was sufficient commonality to justify an injunction against disparate impact was "crying out" for appellate review.

The Seventh Circuit obliged. Much of the opinion is given over to procedural wrangling over whether a plaintiff may appeal the denial of an amended motion for class certification after the court had already denied the original motion. The more interesting result, however, comes after Judge Posner resolves that issue in favor of the plaintiff.

Obviously a single proceeding, while it might result in an injunction, could not resolve class members’ claims. Each class member would have to prove that his compensation had been adversely affected by the corporate policies, and by how much. So should the claim of disparate impact prevail in the class-wide proceeding, hundreds of separate trials may be necessary to determine which class members were actually adversely affected by one or both of the practices and if so what loss he sustained—and remember that the class has 700 members. But at least it wouldn’t be necessary in each of those trials to determine whether the challenged practices were unlawful. Rule 23(c)(4) provides that “when appropriate, an action may be brought or maintained as a class action with respect to particular issues.” The practices challenged in this case present a pair of issues that can most efficiently be determined on a class-wide basis, consistent with the rule just quoted.

(Emphasis added.) Judge Posner also noted that the usual concern about bet-the-company litigation was not present in this case.

Merrill Lynch is in no danger of being destroyed by a binding class-wide determination that it has committed disparate impact discrimination against 700 brokers, although an erroneous injunction against its teaming and account distribution policies could disadvantage it in competition with brokerage firms that employ similar policies—though we have no information on whether others do.

And he concluded that overall, the benefits of issue certification in this case likely exceeded the costs.

We have trouble seeing the downside of the limited class action treatment that we think would be appropriate in this case, and we conclude that the district judge erred in deciding to the contrary (with evident misgivings, however).

So does this herald an era of widespread issue certification? Probably not. As Judge Posner notes throughout his opinion, there are a number of special circumstances in this case. Among them are the fact that the class is willing to seek injunctive relief, and to postpone any ruling on damages or back pay. For this set of plaintiffs, who have been litigating for years, this makes sense. But a plaintiff’s lawyer looking to file a new lawsuit might not be willing to put in a substantial upfront investment without a promise of monetary recovery if he wins. Moreover, the Merrill Lynch plaintiffs challenged two specific policies–teaming (allowing brokers to form teams, which apparently resulted in some de facto segregation) and account distribution (whose subjective criteria appeared to result in discriminatory distribution of accounts)–that were not counterbalanced by an explicit nondiscrimination policy like the one in Dukes.  Assuming that companies are taking the Supreme Court’s hint that an explicit antidiscrimination policy can make it harder to make a common issue out of a "subjective" policy, this may have presented a rare opportunity.

Nonetheless, Judge Posner’s opinion provides a rare example of how a plaintiff might actually structure a request for issue certification. And for that reason alone, it is well worth the defense attorney’s attention.

(Hat tip to George S. Robot, who brought the–literally–fresh-from-the-press opinion to the DePaul Symposium, and graciously shared much of the backstory with the participants.)