Giving a Pass to Decades of Blatant Discrimination

On March 9, 2006, the Fourth Circuit issued a split 2-1 decision that effectively denied over a million “low income, impoverished, and disadvantaged African-Americans” an opportunity to remedy decades of racial injustice. The opinion was authored by Bush I appointee Karen Williams – often mentioned as a potential Bush II Supreme Court nominee – and joined by a Bush II district court appointee sitting by designation. Starting in 1911, and continuing until 2000, when the practice officially ended, the Jefferson-Pilot company charged African-Americans higher rates than whites for low-value life insurance policies. Despite the plain prohibitive language of post-Civil War anti-discrimination laws, Jefferson-Pilot boldly argued that the practice was “a wise business decision based on mortality tables showing that African-Americans had shorter life expectancies and were thus higher life-insurance risks than similarly situated whites.”

Four African-American policy holders filed a class action lawsuit on behalf of 1.4 million individuals, charging that Jefferson-Pilot’s practice constituted unlawful racial discrimination. This is precisely the kind of case for which the class action mechanism was created. In fact, it is the kind of case that realistically can be maintained only as a class action because the rather small amount of damages suffered by each individual does “not provide the incentive for any individual to bring a solo action prosecuting his or her rights,” according to the Supreme Court. That’s where Judge Williams’ ruling comes in. She refused to certify the case as a class action, and thus effectively gutted it. Her reason? The class members’ claims might not be sufficiently similar for adjudication within the same case. Not because Jefferson-Pilot didn’t have a uniform, discriminatory practice, mind you. And not because all class members didn’t suffer the same kind of harm. But rather because, despite Jefferson-Pilot’s best efforts at concealment, intermittent media reports about discrimination within the insurance industry through the years might have exposed some class members, but not others, to Jefferson-Pilot’s wrongdoing outside the statute of limitations. In other words, Judge Williams gutted the case because Jefferson-Pilot might not have been uniformly successful in hiding its decades-long discrimination.

This reasoning is ... well ... twisted. On the one hand, as the dissenting judge, Clinton appointee Blaine Michael, pointed out: since there is no proof that there were individual differences in what class members could have known about Jefferson-Pilot’s practices, the fact that all could have been exposed to the same media reports only bolsters their case for class-wide adjudication. On the other hand, and more fundamentally, Judge Williams’ logic automatically bars class actions – and as a practical matter, any kind of justice – for any concealed discriminatory practice that endures longer than the period of the applicable statute of limitations. Put differently, the longer a company discreetly discriminates, the better off it is. The Fifth Circuit noted the absurdity of this reasoning in a recent case involving a similar issue:

To hold that each class member must be deposed as to precisely when, if at all, he learned of defendants’ practices would be tantamount to adopting a per se rule that civil rights cases involving deception or concealment cannot be certified [as class actions] outside a two- or three-year period. … Such a result would foreclose use of the class action device for a broad subset of claims, a result inconsistent with the efficiency aims of [the rule authorizing class actions].

Needless to say, the Fifth Circuit came to a different conclusion than the Fourth.

In his dissent, which cited the Fifth Circuit case as precedent, Judge Michael correctly observed that because of the majority opinion, Jefferson-Pilot “will never be held to account if it discriminated against 1.4 million African-Americans by charging them higher premiums for industrial life insurance than it charged whites.” What he proceeded to say, albeit in a far more judicious manner, was equally apt: judges like Karen Williams should stop misusing otherwise salutary procedural rules to improperly close the courthouse doors to claims of long-lasting, egregious misconduct.

Thorn v. Jefferson-Pilot Life Insurance, 438 F.3d 376 (4th Cir. 2006).