adequately represented

Phillips Petroleum Company, a Delaware corporation with its principal place of business in Oklahoma, produced or purchased natural gas from leased land in 11 states during the 1970s. It sold most of the gas in interstate commerce at prices regulated by the Federal Power Commission, later the Federal Energy Regulatory Commission. Beginning in the mid-1970s Phillips proposed price increases. It collected higher amounts subject to refund with interest if disapproved. Phillips suspended royalty payments to lessors until final Commission approval. It paid the suspended royalties of $3.7 million in 1976, $4.7 million in 1977, and $2.9 million in 1978 without interest after the increases were approved. In 1979 the Commission began investigating overcharges. In 1983 it issued an opinion ordering refunds. Royalty owners Irl Shutts, a Kansas resident, and Robert and Betty Anderson, Oklahoma residents owning leases in Oklahoma and Texas, filed suit in Kansas state court seeking interest on the suspended royalties. They sought to represent a class of 33,000 royalty owners later reduced to 28,100 members after 3,400 opted out and 1,500 could not be notified. Fewer than 1,000 class members resided in Kansas and only about one-quarter of one percent of the leases were located there. The Kansas trial court certified the class under a state statute modeled on Federal Rule of Civil Procedure 23 on an opt-out basis. It sent first-class mail notice describing the action and the right to opt out. The court applied Kansas law to award interest at Commission rates followed by the Kansas post-judgment rate of 15 percent. After the Kansas Supreme Court affirmed, the United States Supreme Court granted certiorari in 1984.

Before us are two cases in which proposed defendant-intervenors were denied intervention under Federal Rule of Civil Procedure 24(a) and (b). The actions were brought against the University of Michigan to contest the use of an applicant's race as a factor in determining admission. The appeals come from separate district courts but present similar issues. We have therefore consolidated the two cases for purposes of this opinion. In Gratz v. Bollinger, the named plaintiffs are two white applicants who were denied admission to the College of Literature, Arts and Science. They allege that the College's admissions policy violates the Equal Protection Clause of the Fourteenth Amendment, 42 U.S.C. § 1981 and § 1983, and 42 U.S.C. §§ 2000d et seq. The plaintiffs seek compensatory and punitive damages, injunctive relief forbidding continuation of the alleged discriminatory admissions process, and admission to the College. The proposed intervenors are 17 African-American and Latino/a individuals who have applied or intend to apply to the University, and the Citizens for Affirmative Action's Preservation (CAAP), a nonprofit organization whose stated mission is to preserve opportunities in higher education for African-American and Latino/a students in Michigan. The district court denied their motion for intervention as of right, holding that the plaintiffs did not have a substantial interest in the litigation and that the University could adequately represent the proposed intervenors' interests. The district court also denied the proposed intervenors' alternative motion for permissive intervention. In Grutter v. Bollinger, the named plaintiff is a white woman challenging the admissions policy of the University of Michigan Law School. She alleges that the race-conscious admissions policy utilized by the law school violates the Equal Protection Clause of the Fourteenth Amendment, 42 U.S.C. § 1981 and § 1983, and 42 U.S.C. §§ 2000d et seq. Grutter seeks compensatory and punitive damages, injunctive relief forbidding continuation of the alleged discriminatory admissions process, and admission to the law school. The proposed intervenors are 41 students and three pro-affirmative action coalitions. The individual proposed intervenors include 21 undergraduate students of different races who currently attend different undergraduate institutions, all of whom plan to apply to the law school for admission. Five black students who currently attend local high schools also plan to apply to the law school for admission. Twelve students of different races currently attend the law school. A paralegal and a Latino graduate student at the University of Texas at Austin intend to apply to the law school for admission. A black graduate student at the University of Michigan is a member of the Defend Affirmative Action Party. The district court denied the motion to intervene as of right on the basis that the intervenors failed to show that their interests would not be adequately represented by the University. The district court also denied the proposed intervenors' alternative motion for permissive intervention. The plaintiff opposed the motion to intervene, but the defendants, officials of the Law School and the University, did not oppose the motion. The appeals were argued on June 8, 1999, and decided on August 10, 1999.

Coopers & Lybrand is an accounting firm that certified the financial statements in a prospectus issued in connection with a 1972 public offering of securities in Punta Gorda Isles for an aggregate price of over $18 million. Respondents purchased securities in reliance on that prospectus. In its next annual report to shareholders, Punta Gorda restated the earnings that had been reported in the prospectus for 1970 and 1971 by writing down its net income for each year by over $1 million. Thereafter, respondents sold their Punta Gorda securities and sustained a loss of $2,650 on their investment. Respondents filed this action on behalf of themselves and a class of similarly situated purchasers. They alleged that petitioner and other defendants had violated sections 11, 12(2), and 17(b) of the Securities Act of 1933 and section 10(b) of the Securities Exchange Act of 1934. The District Court first certified, and then, after further proceedings, decertified the class. Respondents did not request the District Court to certify its order for interlocutory review under 28 U.S.C. § 1292(b). Rather, they filed a notice of appeal pursuant to § 1291. The Court of Appeals regarded its appellate jurisdiction as depending on whether the decertification order had sounded the “death knell” of the action. After examining the amount of respondents’ claims in relation to their financial resources and the probable cost of the litigation, the court concluded that they would not pursue their claims individually. The Court of Appeals therefore held that it had jurisdiction to hear the appeal and, on the merits, reversed the order decertifying the class. Because there is a conflict in the Circuits over this issue, the Supreme Court granted certiorari.

In 1973 the United States Parole Board adopted explicit Parole Release Guidelines that established a customary range of confinement by combining a parole prognosis score with an offense severity rating. On January 25, 1974, respondent John M. Geraghty was convicted in the Northern District of Illinois of conspiracy to commit extortion and making false material declarations to a grand jury and was sentenced to concurrent terms of four years and one year. The Seventh Circuit affirmed the convictions. Geraghty later obtained a reduction of his sentence to 30 months through a Rule 35 motion. Geraghty applied for parole in January 1976 and again in June 1976. Both applications were denied because his offense behavior was rated very high severity, his salient factor score was 11, and the guidelines indicated a range of 26-36 months. He then instituted this civil suit as a class action in the United States District Court for the District of Columbia, challenging the guidelines as inconsistent with the PCRA and the Constitution, and questioning the procedures by which the guidelines were applied to his case. The case was transferred to the Middle District of Pennsylvania where Geraghty was incarcerated. The district court denied class certification as neither necessary nor appropriate and granted summary judgment for the defendants on all claims. Geraghty appealed to the Third Circuit individually and on behalf of the proposed class. Another prisoner represented by the same counsel moved to intervene. On June 30, 1977, before any briefs were filed, Geraghty was mandatorily released after serving 22 months of his sentence. The Parole Commission moved to dismiss the appeals as moot. The Third Circuit held the litigation was not moot, reversed the denial of class certification, and remanded for further proceedings including evaluation of subclasses. The Supreme Court granted certiorari to resolve the conflict among the courts of appeals on whether a class action challenging parole guidelines becomes moot when the named plaintiff is released from prison while the appeal from denial of class certification is pending.

In 2001, three current or former female employees of Wal-Mart Stores, Inc.—Betty Dukes, Christine Kwapnoski, and Edith Arana—filed a lawsuit in the Northern District of California alleging that the company had discriminated against them and other women in pay and promotions. Wal-Mart, the nation’s largest private employer with approximately 3,400 stores across the country and more than one million employees, delegated pay and promotion decisions to local store managers who exercised broad discretion in a largely subjective manner. The plaintiffs claimed that this discretion was exercised disproportionately in favor of men, resulting in lower pay and fewer promotions for female employees. They sought to represent a class of approximately 1.5 million current and former female employees who had worked at any Wal-Mart domestic retail store since December 26, 1998. To support their motion for class certification, the plaintiffs presented statistical evidence from experts Dr. Richard Drogin and Dr. Marc Bendick showing pay and promotion disparities between men and women, anecdotal evidence consisting of about 120 affidavits from female employees describing discriminatory experiences at only 235 of the company's 3,400 stores, and the testimony of sociologist Dr. William Bielby who analyzed Wal-Mart’s corporate culture. Betty Dukes began working at a Pittsburg, California store in 1994 as a cashier and was later promoted to customer service manager before being demoted; she alleged retaliation and that male greeters were paid more. Christine Kwapnoski worked at Sam’s Club stores and claimed a male manager yelled at female employees and told her to “doll up.” Edith Arana worked at a Duarte, California store from 1995 to 2001. She was denied opportunities for management training despite repeated requests. The District Court certified the class under Federal Rule of Civil Procedure 23(b)(2), finding that the plaintiffs had presented significant evidence of a company-wide pattern of discrimination. The Court of Appeals for the Ninth Circuit, sitting en banc, substantially affirmed the certification order. The Supreme Court granted certiorari to review whether the class certification was consistent with Rule 23(a) and (b)(2).