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Osgood v. Harrah's Entertainment

August 22, 2001


The opinion of the court was delivered by: Orlofsky, District Judge



Plaintiff, Mary Osgood ("Osgood"), has moved for class certification pursuant to Fed. R. Civ. P. 23 ("Rule 23"). For the reasons set forth below, I conclude that Plaintiff has satisfied the four prerequisites of Rule 23(a), namely, numerosity, commonality, typicality, and adequacy of representation. Furthermore, because Plaintiff seeks injunctive and declaratory relief from an allegedly discriminatory employment practice, I conclude that Plaintiff's claim for declaratory and injunctive relief is appropriate for maintenance as a class claim pursuant to Rule 23(b)(2). Finally, because I find that Plaintiff's individual claims for monetary damages are not incidental to, but predominate over Plaintiff's claims for equitable relief, I shall deny Plaintiff's request to certify a class as to damages under Rule 23(b)(3).


Plaintiff, Mary Osgood, is a Caucasian female who was employed by Defendants, Harrah's Entertainment, Inc., d/b/a Harrah's Atlantic City, Harrah's Atlantic City Inc., Marina Associates, Inc., and Marina Associates, d/b/a Harrah's Casino Hotel Atlantic City (together, "Harrah's") from October 27, 1980 until approximately November 15, 2000. Amd. Compl. at ¶ 26; Transcript, Oral Argument, November 29, 2000 5:17-18.

Osgood alleges that in August, 1999, she was demoted from her position as a shift manager, a "salary grade 23" position which she alleges she had then held for approximately three years. Amd. Compl. at ¶ 28. According to the Complaint, at the time of her alleged demotion, Osgood was offered a position as a casino host, a "grade 17" position which entitled her to fewer employee benefits, such as bonus incentives, stock awards, and participation in deferred compensation plans. Id. at ¶ 30. Osgood alleges that she was replaced by an African-American employee, Glenn Cunningham ("Cunningham"), in the position of shift manager at the time of her demotion to casino host. Id. at ¶ 31.

Plaintiff contends that her demotion was the result of discrimination by the Defendants against her and "the class of Caucasian employees and applicants on the basis of their race as a result of the defendants' implementation and application of a legally insufficient affirmative action plan." Amd. Compl. at 1-2. According to Plaintiff, "Defendants' affirmative action plan contains preferences for racial minorities, and was not effected for remedial purposes....Because defendants' affirmative action plan was not effected to remedy past discrimination or its effects, and because defendants have used and continued to use race in all of their employment decisions, the defendants have violated federal and state laws prohibiting discrimination in employment." Id. at 2.

The "affirmative action plan" to which Plaintiff refers is Harrah's Equal Employment Business Opportunity Plan ("EEBOP"). Pursuant to the New Jersey Casino Control Act, N.J.S.A. § 5:12-1 et seq., all casino licensees are required to develop an EEBOP, "in accordance with an affirmative-action program approved by the [New Jersey Casino Control] commission and consonant with the provisions of the [New Jersey] `Law Against Discrimination' ["LAD"] [N.J.S.A. § 10:5-1 et seq.]" N.J.S.A. § 5:12-134. The New Jersey Administrative Code sets forth a description of the EEBOPs as follows:

§ 19:53-6.1 Equal Employment and Business Opportunity Plan (EEBOP); purpose and basic elements

(a) In order to insure compliance with the requirements of section 134 of the Act and this chapter, each casino licensee and applicant shall be required to submit an Equal Employment and Business Opportunity Plan (EEBOP) to the Commission for its approval. The EEBOP of each casino licensee or applicant shall address in specific terms the strategies, procedures and internal requirements which the casino licensee or applicant intends to implement so that the equal employment opportunity, equal business opportunity and affirmative action objectives and goals of the Act and this chapter are achieved, both on a current and continuing basis.

(b) Each casino licensee or applicant shall be encouraged to use imagination and innovation in the development of its EEBOP. Although, in general, no particular format will be required, every EEBOP prepared by a casino license applicant shall include Sections, at a minimum, addressing the first three basic subject matter areas listed below, and every EEBOP prepared by a casino licensee shall contain sections addressing each of the following areas:

1. General regulatory requirements;2. Construction requirements;3. Operations work force requirements; and4. Business requirements. N.J.A.C. § 19:53-6.1.

Harrah's has established an EEBOP which describes and governs its affirmative action initiatives. According to copies of Harrah's EEBOP reports submitted by the Plaintiff, Harrah's sets goals with respect to the composition of its workforce based upon race and gender, uses recruitment and selection procedures designed to help it meet these objectives, and analyzes the composition of its workforce periodically to monitor its progress. See Pl.'s Exh. B (Harrah's 1998-2000 EEBOP) and C (Harrah's 1996-1998 EEBOP).

Plaintiff contends that her "demotion" occurred as a result of Harrah's EEBOP. Amd. Compl. at ¶ 36. Furthermore, Plaintiff claims that "every promotion that took place at Harrah's included a race based consideration in accordance with Harrah's affirmative action plan." Id. at ¶ 35. Accordingly, Plaintiff seeks to certify the following class:

[A]ll individuals of the Caucasian race who have been and are subject to defendants' affirmative action plan within the state of New Jersey and the racial preferences contained therein during the time period of 1998 up through to the present. Id. at ¶ 11.

Specifically, Count I of Plaintiff's Amended Complaint alleges the violation of Plaintiff's and the class's rights under 42 U.S.C. § 1981. Count II alleges the violation of the Plaintiff's and the class's rights under the New Jersey Law Against Discrimination, N.J.S.A. §10:5-1 et seq. Finally, Count III alleges the violation of Plaintiff's and the class's rights under 42 U.S.C. § 1983.


This Court has jurisdiction pursuant to 28 U.S.C. §§ 1331 *fn1 and 1367. *fn2


Rule 23 of the Federal Rules of Civil Procedure governs the certification of classes and the maintenance of class actions. Rule 23(a) sets forth four general prerequisites for the certification of a class:

(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law of fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class. Fed. R. Civ. P. 23(a).

As the Third Circuit recently explained, "[t]he certification requirements of Fed. R. Civ. P. 23(a) embrace two rudimentary principles: 1) the necessity and efficiency of adjudicating the claims as a class and 2) the assurance of protecting the interests of absentee members." Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., ___ F.3d ____, 2001 WL 877524 at *15 (3d Cir. Aug. 6, 2001)(citations omitted). "If the class does not satisfy each of the 23(a) criteria, the suit cannot be maintained as a class action." Id.

In addition to finding that plaintiff(s) have satisfied the four requirements of Rule 23(a), a District Court must also determine, pursuant to Rule 23(b), that one of the following three rationales justifies the maintenance of the suit as a class action:

(1) the prosecution of separate actions by or against individual members of the class would create a risk of

(A) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or

(B) adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or

(2) the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or

(3) [] questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. Fed. R. Civ. P. 23(b).

In this case, Plaintiff originally sought certification pursuant to subsections (b)(1)(A) and (b)(1)(B), and argued, in the alternative, that the proposed plaintiff class also met the requirements of (b)(2). Pl.'s Br. at 18-19. In a "Supplemental Reply Memorandum," however, Plaintiff asked the Court to adopt "a bifurcated certification procedure," also referred to as "hybrid certification," combining aspects of Rule 23(b)(2) and 23(b)(3). Pl.'s Suppl. Reply at 1.

According to Plaintiff:

In a nutshell, a hybrid certification consists of two stages. During the first, liability is resolved under Rule 23(b)(2) and claimants may not opt out of the class. Shores v. Publix Super Markets, Inc., 69 Empl. Prac. Dec. ΒΆ 44,447 [1996 WL 407850](M.D. Fla. 1996). During stage two, legal damages are resolved, and claimants may opt out of ...

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