                              In the
 United States Court of Appeals
                For the Seventh Circuit
                          ____________

No. 04-8001
GREG ALLEN, et al.,
                                            Plaintiffs-Appellants,
                                 v.

INTERNATIONAL TRUCK        AND   ENGINE CORPORATION,
                                              Defendant-Appellee.
                          ____________
  Petition for Leave to Appeal from the United States District Court
     for the Southern District of Indiana, Indianapolis Division.
          No. IP 02-902-C-Y/K—Richard L. Young, Judge.
                          ____________
 SUBMITTED JANUARY 23, 2004—DECIDED FEBRUARY 13, 2004
                          ____________



  Before BAUER, EASTERBROOK, and KANNE, Circuit Judges.
  EASTERBROOK, Circuit Judge. Plaintiffs are 27 current or
former employees at the Indianapolis plant of International
Truck & Engine Corp., which used to be called Navistar
International Corporation. They contend that white employ-
ees at the plant evinced pervasive hostility toward, and
harassment of, their black co-workers, and that, when black
employees complained, the plant’s top supervisors told them
that nothing would be done, and their best option was to
quit. Plaintiffs seek both financial and equitable relief; they
also want to be certified as representatives of a class of the
plant’s current and former black employees, some 350 in
number during the period covered by the complaint. The
2                                                 No. 04-8001

district judge found that all requirements of Fed. R. Civ. P.
23(a) have been satisfied but declined to allow plaintiffs to
represent others similarly situated: the presence of individ-
ual claims made class treatment of damages imprudent,
and the seventh amendment rendered class treatment of
the equitable theories improper. Plaintiffs have filed a
petition under Rule 23(f) seeking interlocutory review of
this decision. The parties’ comprehensive submissions show
not only that immediate review would promote the develop-
ment of the law governing questions that have escaped
resolution on appeal from final decisions, see Blair v.
Equifax Check Services, Inc., 181 F.3d 832, 835 (7th Cir.
1999), but also that the district court committed an error
best handled by a swift remand. It is better to act sum-
marily on this interlocutory matter than to delay the
proceedings during full-dress appellate review.
  After concluding that Rule 23(a)’s requirements had been
met, the district court turned to the two pertinent sub-
sections of Rule 23(b). Although the plaintiffs’ allegations fit
Rule 23(b)(2), which deals with situations in which
“the party opposing the class has acted or refused to act
on grounds generally applicable to the class, thereby mak-
ing appropriate final injunctive relief or corresponding
declaratory relief with respect to the class as a whole”,
the statutory authorization in 1991 of damages recoveries
for employees in Title VII cases has complicated what used
to be an almost automatic class certification in pattern-or-
practice cases. See General Telephone Co. v. Falcon, 457
U.S. 147 (1982). The difficulty is that employees may prefer
to litigate damages claims on their own behalf, and may
have a constitutional entitlement to do so, while class
certification under Rule 23(b)(2) usually means that class
members will not be allowed to opt out. Jefferson v.
Ingersoll International Inc., 195 F.3d 894 (7th Cir. 1999),
holds that Rule 23(b)(2) may not be used, even in a pattern-
or-practice suit, unless persons with significant damages
No. 04-8001                                                 3

claims are allowed to opt out of the class to the extent that
the litigation concerns financial relief. Accord, Lemon v.
Operating Engineers, 216 F.3d 577 (7th Cir. 2000). The
district judge concluded that employees’ financial stakes are
too high to be called incidental to equitable relief, and that
opt-out rights therefore must be extended. Although this
conclusion did not foreclose certification under Rule
23(b)(3)—or perhaps hybrid certification under Rule 23
(b)(2) with opt-out confined to damages issues, a possibility
suggested by Jefferson—the judge thought that neither step
would be prudent because the employees’ injuries are
dissimilar. Some may have been exposed to pervasive har-
assment and suffered great distress; others may have seen
or heard little of the offensive material. This meant, the
judge wrote, that “issues common to the class as a whole
are subordinate to the specific circumstances surrounding
each individual Plaintiffs’ [sic] claim for compensatory and
punitive damages.”
  That left the possibility of a class certified under Rule
23(b)(2) for equitable relief only, with the 27 individual
plaintiffs pursuing damages for their own accounts. Here
the district court found the seventh amendment to be a
stumbling block. Factual issues common to damages and
equitable claims must be tried to a jury, whose resolution
of factual matters will control. See Dairy Queen, Inc. v.
Wood, 369 U.S. 469, 479 (1962); Beacon Theatres, Inc. v.
Westover, 359 U.S. 500 (1959). The judge wrote: “Given the
individual and case-specific issues relative to Plaintiffs’
hostile work environment claims, the court finds that pur-
suing this course would result in confusion and be overly
burdensome to the resources of the court system.” Other
district judges within this circuit have reached contrary
conclusions, and so far we have not had occasion to address
this subject.
 It is hard to see why management of a class certified
under Rule 23(b)(2) for prospective relief alone would be
4                                                 No. 04-8001

any more difficult than management of a suit with 27 in-
dividual plaintiffs seeking both legal and equitable relief. In
either event, a jury trial must be held, and factual matters
bearing on both damages and injunctive relief must be
presented to that body. Even if the judge were to hold 27
separate damages trials, each of the 27 plaintiffs would be
entitled to present evidence about the plant-wide environ-
ment in order to show entitlement to an injunction. The
district judge did not explain how even one trial, with 27
plaintiffs, could be easier to manage than a class proceed-
ing; and if the judge contemplated 27 trials, then a class
proceeding looks even better by comparison. What is more,
handling equitable issues on a class-wide basis would solve
a problem sure to bedevil individual proceedings: How is it
feasible to draft and enforce an injunction that will bear on
these 27 plaintiffs alone, and not on the other 323 black
employees? Unless it is possible to prepare such relief—and
we do not see how it could be, or why a court should
try—then the equitable aspects of the litigation are class-
wide whether the judge certifies a class action or not. (The
need for, if not inevitability of, class-wide treatment when
injunctive relief is at stake is what Rule 23(b)(2) is about.)
Formal certification has two benefits over the informal
approach: first, class certification obliges counsel (and the
representative plaintiffs) to proceed as fiduciaries for all
350 employees, rather than try to maximize the outcome for
these 27 at the potential expense of the other 323; second,
certification will entitle counsel to attorneys’ fees represent-
ing the gains (if any) achieved by all employees, and not
just the named plaintiffs.
  Certifying a class for injunctive purposes, while handling
damages claims individually, does not transgress the sev-
enth amendment. Just as in a single-person (or 27-person)
suit, a jury will resolve common factual disputes, and its
resolution will control when the judge takes up the request
for an injunction. International Truck will enjoy its jury-
No. 04-8001                                                  5

trial right either way; and once one jury (in individual or
class litigation) has resolved a factual dispute, principles of
issue preclusion can bind the defendant to that outcome in
future litigation consistently with the seventh amendment.
See Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979); cf.
Blonder-Tongue Laboratories, Inc. v. University of Illinois
Foundation, 402 U.S. 313 (1971). The other 323 employees’
right to jury trial can be protected in either or both of two
ways: By offering them the opportunity to opt out, or by
denying them (in any later damages proceedings) both the
benefits and the detriments of issue and claim preclusion.
See Lytle v. Household Manufacturing, Inc., 494 U.S. 545
(1990); Premier Electrical Construction Co. v. National
Electrical Contractors Ass’n, Inc., 814 F.2d 358 (7th Cir.
1987). Thus a class proceeding for equitable relief vindi-
cates the seventh amendment as fully as do individual
trials, is no more complex than individual trials, yet
produces benefits compared with the one-person-at-a-time
paradigm. The district court erred in concluding that
seventh-amendment concerns foreclose certification of a
class under Rule 23(b)(2).
  Whether full class treatment of damages issues would be
manageable is too fact-sensitive, and too much of a judg-
ment call, to warrant interlocutory review in this court. But
because this litigation will proceed as a class action for
equitable relief, it would be prudent for the district court to
reconsider whether at least some of the issues bearing on
damages—such as the existence of plant-wide racial
animosity, which collectively “constitute[s] one unlawful
employment practice”, National Railroad Passenger Corp.
v. Morgan, 536 U.S. 101, 117 (2002)—could be treated on a
class basis (with opt-out rights under Rule 23(b)(3) or
a hybrid Rule 23(b)(2) certification) even if some other
issues, such as assessment of damages for each worker,
must be handled individually. See, e.g., Lemon, 216 F.3d at
582; Williams v. Burlington Northern, Inc., 832 F.2d 100,
6                                                No. 04-8001

103-04 (7th Cir. 1987); De La Fuente v. Stokely-Van Camp,
Inc., 713 F.2d 225, 233 (7th Cir. 1983); Mullen v. Treasure
Chest Casino, LLC, 186 F.3d 620, 627-28 (5th Cir. 1999).
(The employer’s contention that even partial class certifica-
tion is inappropriate because workers may have liked being
called “nigger” and “jungle bunny,” chuckled when other
workers posted cartoons of black men being lynched and
displayed nooses in the workplace, or at least not minded
such things, strains credulity. Still, questions about subjec-
tive reactions also could be isolated for individual treatment
if evidence demonstrates that insults and threats rolled off
the backs of some workers.)
  The order of the district court is vacated, and the case is
remanded with instructions to certify a class under Rule
23(b)(2) for equitable matters and to reconsider the extent
to which damages matters also could benefit from class
treatment.

A true Copy:
       Teste:

                        ________________________________
                        Clerk of the United States Court of
                          Appeals for the Seventh Circuit




                   USCA-02-C-0072—2-13-04
