Burkhalter v. Montgomery Ward & Co.

676 F.2d 291, 28 Fair Empl. Prac. Cas. (BNA) 785, 33 Fed. R. Serv. 2d 1440, 1982 U.S. App. LEXIS 20478, 28 Empl. Prac. Dec. (CCH) 32,580
CourtCourt of Appeals for the Eighth Circuit
DecidedApril 2, 1982
DocketNo. 81-1787
StatusPublished
Cited by6 cases

This text of 676 F.2d 291 (Burkhalter v. Montgomery Ward & Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burkhalter v. Montgomery Ward & Co., 676 F.2d 291, 28 Fair Empl. Prac. Cas. (BNA) 785, 33 Fed. R. Serv. 2d 1440, 1982 U.S. App. LEXIS 20478, 28 Empl. Prac. Dec. (CCH) 32,580 (8th Cir. 1982).

Opinion

STEPHENSON, Circuit Judge.

This is an appeal from the district court’s1 refusal to allow appellants to intervene in a suit filed by Bruce Burkhalter and settled by him several days prior to appellants’ attempted intervention. Appellants sought to intervene as plaintiffs for the purpose of appealing the district court’s order striking the class action allegations from the complaint. We hold the district court erred in denying the motion to intervene but affirm the court’s action in striking the class action allegations from the complaint.

On June 15, 1978, Bruce Burkhalter filed a lawsuit against appellee Montgomery Ward and Company, Inc. complaining of racial discrimination against himself and other black employees. The action was brought pursuant to 42 U.S.C. §§ 1981, 2000e et seq. On August 13, 1979, the district court entered a pre-trial order directing Burkhalter to file his motion for class certification by November 1,1979. No motion for class certification was filed. On January 10, 1980, the court dismissed the class allegations from the case. More than a month later, Burkhalter filed a motion requesting reconsideration of the dismissal of the class claims which the court denied.

Prior to trial, Jewell Brown, Burkhalter’s original attorney, advised the court that the case had been settled and the complaint was dismissed with prejudice on March 13, 1980. It later developed that the case had been settled without Burkhalter’s consent or knowledge and attorney Brown had kept the proceeds of the settlement.

Attorney Brown subsequently admitted to the embezzlement and surrendered his license to practice. Burkhalter did not receive any of the settlement and retained other counsel to proceed with his suit. He moved to have his case reopened under Rule 60(b). On November 5, 1980, the court granted the motion. On February 2, 1981, approximately within ninety days later, Burkhalter moved to have his denial of class certification reconsidered. The court denied this motion.

On April 29, 1981, the date set for trial, Burkhalter agreed to settle the case for $2,000. This settlement was announced in open court. Under the terms of the settlement, Burkhalter agreed to dismiss his suit and not to appeal the class action aspects of the suit. The complaint was dismissed with prejudice.

Nearly two weeks later, on May 11, appellants in the present case filed a motion to intervene for the purpose of appealing the district court’s order striking the class action allegations from the complaint. The district court, in denying the motion, stated:

First, it was never necessary for this Court to pursue questions of numerosity, typicality or commonality. The class allegations were stricken from the complaint because of plaintiff’s failure to move for class certification within the time allowed by this Court. Certainly this failure was indicative of the plaintiff’s ability to be an adequate class representative, as were his actions on the day set for trial.
Second, this matter was originally dismissed in March, 1980. None of the applicants sought intervention at that time, so it can hardly be said that they have been relying on the plaintiff to champion their cause. Accordingly, this Court does [293]*293not believe the applicants’ request can be described as timely under the facts of this case.
Third, defendant would be unduly prejudiced by intervention at this point in the case. Defendant has already watched one settlement go by the wayside in the interest of justice. To allow intervention would, for all practical purposes, void the benefits of the second settlement as far as defendant is concerned. What incentive would remain for a defendant to ever settle a claim prior to a judgment on the merits if there was always the risk of the case rising from the dead simply because the original complaint contained the apparently magic words “class action”?
This Court recognizes that questions of whether issues are moot or subject to appeal are matters for appellate courts. A district court, however, should not be barred from considering such issues in a case such as the present one. As noted earlier, in McDonald [United Airlines, Inc. v. McDonald, 432 U.S. 385, 97 S.Ct. 2464, 53 L.Ed.2d 423 (1977) ] there was a judgment on the merits and the majority of the Court assumed the original plaintiffs could have appealed the denial of class certification. At the time of the settlement in that case the question of liability was answered and the only question remaining was how much the defendant owed the plaintiffs. In the present case, the parties entered into a settlement prior to any judgment on the merits, and in this Court’s opinion the settlement mooted all issues and prevents an appeal by the original plaintiff or any putative class member, even if Mr. Burk-halter had not expressly agreed to forego an appeal.
In summary, this Court finds that the request is not timely and if granted would result in undue prejudice to the defendant. Accordingly, the motion to intervene is denied.

Burkhalter v. Montgomery Ward & Co., 92 F.R.D. 361, 26 Empl.Prac.Dec. (CCH) 132,-076 (E.D.Ark. 1981).

On appeal, appellants claim the district court erred in denying intervention on the grounds that under United Airlines, Inc. v. McDonald, supra, 432 U.S. at 392-96, 97 S.Ct. at 2468-71, the district court should have allowed intervention even though the motion to intervene was made after Burk-halter had settled the suit and the court had dismissed it. Also, the dismissal was erroneous in view of the unethical conduct of Burkhalter’s attorney.

Appellee replies that because the settlement of Burkhalter’s claims removed his personal stake in the suit, the putative class members had no remaining class interest. Also, it claims that intervention was properly refused because it was not sought on a timely basis, there was no longer a viable cause of action after the entry of an order of dismissal with prejudice, Montgomery Ward would be unfairly prejudiced, and no unusual or compelling circumstances had been shown that would justify the delay.

INTERVENTION

The seminal case in the area of intervention is United Airlines, Inc. v. McDonald, supra, 432 U.S. 385, 97 S.Ct. 2464, 53 L.Ed.2d 423. In that case, one Romasanta challenged, on the basis of Title VII of the 1964 Civil Rights Act, a rule requiring stewardesses, but not stewards, to remain unmarried as a condition of employment. Romasanta fashioned the suit as a class action on behalf of herself and all other United stewardesses discharged because of the no-marriage rule.

The district court ruled that only those stewardesses who had filed charges under either a fair employment statute or United’s collective bargaining agreement constituted the class. The court found the class was too small to satisfy the numerosity requirement of Fed.R.Civ.P. 23(a)(1) and granted United’s motion to strike the class allegations.

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676 F.2d 291, 28 Fair Empl. Prac. Cas. (BNA) 785, 33 Fed. R. Serv. 2d 1440, 1982 U.S. App. LEXIS 20478, 28 Empl. Prac. Dec. (CCH) 32,580, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burkhalter-v-montgomery-ward-co-ca8-1982.