Appeal from the United States District Court for the Northern District of Illinois, Eastern Division, No. 80 C 2032 - James B. Parsons, Judge.
Before BAUER, Chief Judge, POSNER, Circuit Judge, and ESCHBACH, Senior Circuit Judge.
This suit charges that the J.C. Penney Company, which owns a chain of retail stores, committed sex discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. The plaintiff, Diane Colby, is an employee of Penney in Illinois. She is suing on behalf of herself and all similarly situated Penney employees in Illinois. The suit challenges Penney's "head of household" rule. Until 1971, Penney allowed only its male employees to elect coverage for their spouses under the company's medical and dental plans. In that year Penney replaced this explicitly sex-based rule with the "head of household" rule. This rule allows any employee, male or female, to elect coverage for the employee's spouse if the spouse earns less than the Penney employee. Mrs. Colby and the members of her class are female employees who cannot elect coverage for their spouses because their spouses earn more than they do. She argues that although the head of household rule may not (despite its origins) be intended to discriminate against women, it has that effect. Female employees of Penney tend to be concentrated in low-paying jobs, and male wages are on average higher than female wages; hence a larger fraction of male than female employees of Penney are eligible to elect coverage for their spouses under the head of household rule. At argument Mrs. Colby's lawyer, staring fixedly at the members of this panel, likened the head of household rule to a rule disqualifying bald persons: the incidence of the rule would be concentrated on one sex even though the rule was not explicitly based on sex. Such "disparate impact" can condemn an employment practice under Title VII, unless some good business justification is shown. See, e.g., Dothard v. Rawlinson, 433 U.S. 321, 53 L. Ed. 2d 786, 97 S. Ct. 2720 (1977).
Mrs. Colby's suit was filed in 1980, but lay dormant for five years awaiting the outcome of a parallel suit brought by the Equal Employment Opportunity Commission in the federal district court in Detroit, Michigan, challenging Penney's head of household rule on a nationwide basis. The EEOC lost that suit late in 1985, and its appeal to the Sixth Circuit is pending. See EEOC v. J.C. Penney Co., 632 F. Supp. 871 (E.D. Mich. 1985), appeal docketed, No. 86-1139 (6th Cir. Feb. 18, 1986). When the district court's decision in the Detroit case was handed down, the district judge in this case had under advisement Penney's motion for summary judgment, and in March 1986 he granted the motion on the ground that the Detroit decision was stare decisis. The judge described the failure of the EEOC's suit as "persuasive precedent" but did not discuss the merits of the Detroit decision or of this case. The court noted noncommittally that another suit against Penney's head of household rule had also failed See Wambheim v. J.C. Penney Co., 705 F.2d 1492 (9th Cir. 1983).
Mrs. Colby has appealed, challenging not only the dismissal of her action but the district court's earlier ruling refusing (without any statement of reasons) to certify her suit as a class action. Penney defends both the dismissal and the denial of class certification on a variety of grounds, most of which the district court did not address.
We first address Penney's argument that Mrs. Colby has not standing to maintain this suit, and therefore that it is not within the subject matter jurisdiction of the federal courts. O'Shea v. Littleton, 414 U.S. 488, 494, 38 L. Ed. 2d 674, 94 S. Ct. 669 (1974). Penney argues, frivolously, that Mrs. Colby has no standing because she has never applied for spouse coverage. But the whole point of the suit is that she is ineligible; nor does Penney contend otherwise. Second and more substantially, but we think unavailingly, Penney argues that throughout the entire period of Mrs. Colby's employment with Penney her husband was never lacked insurance coverage at his place of employment, and therefore she has not been harmed by the head of household rule. But that is like saying that if an insurance company cancels your medical insurance policy, you can't complain till you get sick. Mrs. Colby claims to want spouse coverage, and there is no basis in the record compiled thus far in this case to doubt that she is sincere and would derive a benefit from the additional coverage for which she would not have to pay. For aught that appears, Mr. Colby's coverage by his employer is less generous than Penney's spouse coverage, even though he has a higher salary than his wife - indeed, maybe he has a higher salary because his employer provides fewer fringe benefits. Or he and his wife may be worried about what would happen if he lost his job. Maybe he would like to quit and find another job and would do so if he had interim coverage, which may be unavailable from his present employer. Although it is possible that this is a nuisance suit and Mrs. Colby has no desire for spouse coverage, her complaint alleges that she does desire it and Penney has not cast enough doubt on the truth of the allegation by its speculations in this court to justify our throwing the case out on jurisdictional grounds or even remanding for a hearing on jurisdiction.
We turn now to the question whether the suit was properly dismissed on the merits. The ground relied on by the district court was stare decisis. That means deciding a case in accordance with what has been decided previously in other, similar cases (similar in the sense of not being legally distinguishable); and in a literal sense that is what the district judge did. But the doctrine is more complex than the summary definition just offered, and was misapplied. The distinction essential to understanding the doctrine is between the persuasiveness and the authority of a previous decision. Any decision may have persuasive force, and invite - indeed compel - the careful and respectful attention of a court confronted with a similar case. But unless the earlier decision is authoritative, the court that decides the later case does not discharge its judicial responsibilities adequately by merely citing the earlier decision and following it without so much as indicating agreement with it, let alone analyzing its merits. That is what the district court did here; it dismissed this case because the district court in Detroit had dismissed a similar case, not because the reasoning in the Detroit decision was persuasive. The district judge in this case did say that the "EEOC's action . . . does offer persuasive precedent," but taken in conjunction with his earlier statement that "the doctrine of stare decisis can serve to preclude the possibility that plaintiff can prevail in this case," and his failure to discuss the merits of the Detroit decision or of the present case, the reference to "persuasive precedent" appears intended to mean only that the dismissal of the EEOC's suit entitled the judge in this case to treat the Detroit decision as stare decisis.
That would be a proper application of stare decisis only if the Detroit decision were authoritative, which is to say, had weight independent of its persuasive power. Whether a decision is authoritative depends on a variety of factors, of which the most important is the relationship between the court that decided it and the court to which it is cited later as a precedent. The simplest relationship is hierarchical: the decisions of a superior court in a unitary system bind the inferior courts. The most complex relationship is between a court and its own previous decisions. A court must give considerable weight to those decisions unless and until they have been overruled or undermined by the decisions of a higher court, or other supervening developments, such as a statutory overruling. But it is not absolutely bound by them, and must give fair consideration to any substantial argument that a litigant makes for overruling a previous decision.
One can hardly speak of stare decisis at all with regard to parallel court systems. We are bound to follow a decision of the Supreme Court unless we are powerfully convinced that the Court would overrule it at the first opportunity. Olson v. Paine, Webber, Jackson & Curtis, Inc., 806 F.2d 731 (7th Cir. 1986). In cases where the rule of decision in the law of some state, we owe the same deference to the highest court of that state. Erie R.R. v. Tompkins, 304 U.S. 64, 78-80, 82 L. Ed. 1188, 58 S. Ct. 817 (1938). But we can give decisions of the House of Lords or the Cour de Cassation as little weight as we like (putting aside complications introduced by conflict of laws principles, which might make foreign law controlling, in just the same way that state law controls the substantive issues in a diversity suite). We have an intermediate obligation to our sister federal courts of appeals. Bearing in mind the interest in maintaining a reasonable uniformity of federal law and in sparing the Supreme Court the burden of taking cases merely to resolve conflicts between circuits, we give most respectful consideration to the decisions of the other courts of appeals and follow them whenever we can. Out district judges should, of course, do likewise with regard to such decisions, as we noted in Richards v. Local 134, Int'l Brotherhood of Electrical Workers, 790 F.2d 633, 636 (7th Cir. 1986). But neither this court nor the district courts of this circuit give the decisions of other courts of appeals automatic deference; we recognize that, within reason, the parties to cases before us are entitled to our independent judgment. For a good discussion see 1B Moore's Federal Practice P 4.02, at pp. 14-16 (2d ed. 1984).
A posture somewhere in between some deference and complete deference is proper when cases in different circuits challenge the same practice of the same defendant, particularly if different outcomes would place the defendant under inconsistent obligations. If Penney had lost in Detroit, Mrs. Colby might have been able to use the judgment there to bar Penney from defending itself in this case. See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 58 L. Ed. 2d 552, 99 S. Ct. 645 (1979) ("offensive" use of collateral estoppel). A judgment for Penney cannot be used against her in the same way, because she was not a party to the Detroit case; but the fact that the Detroit case involved the identical issue in a lawsuit brought against the identical defendant by a plaintiff having the same interests as Mrs. Colby is a reason for the district court in the present case to have given serious consideration to the Detroit decision - but not a reason to invoke stare decisis and give the decision complete deference automatically, as the court appears to have done.
Where different outcomes would place the defendant under inconsistent legal duties, the case for the second court's not going into conflict with the first is particularly strong. A conflict would place the defendant in an impossible position unless the Supreme Court agreed to hear the case, which it might be reluctant to do if the conflicting decisions, however excruciating for the defendant, raised no issue of general significance - yet might feel obliged to do anyway. See, e.g., GTE Sylvania, Inc. v. Consumers Union of the United States, Inc., 445 U.S. 375, 63 L. Ed. 2d 467, 100 S. Ct. 1194 (1980). The second condition for greater deference - different outcomes would place the defendant under inconsistent obligations - is missing in this case, however. And even in that situation, district judges in this circuit must not treat decisions by other district judges, in this and a fortiori in other circuits, as controlling, unless of course the doctrine of res judicata or of collateral estoppel applies. Such decisions will normally be entitled to no more weight than their intrinsic persuasiveness merits. The reasons we gave for giving some though not controlling weight to decisions of other federal courts of appeals do not apply to decisions of other district courts, because the responsibility for maintaining the law's uniformity is a responsibility of appellate rather than trial judges and because the Supreme Court does not assume the burden of resolving conflicts between district judges whether in the same or different circuits. Federal district judges in Detroit do not make law that is binding on federal district judges in Chicago. In light of this bedrock principle it becomes almost a detail that the EEOC was proceeding on a different theory than the plaintiff in this case (intentional discrimination there versus disparate impact here) and that the Detroit decision is not final, since it has been appealed and the appeal is pending.
The Detroit decision and even more clearly the Ninth Circuit decision have no preclusive effect in the present case because of res judicata or collateral estoppel, as the district judge in this case correctly held en route to his unfortunate application of stare decisis, but as Penney contests. Mrs. Colby was not a party to either of those suits; she has never had her day in court. It is true as Penney points out that the EEOC in the Detroit case was seeking nationwide relief against Penney's head of household rule and that, if the EEOC had won, its victory would have given Mrs. Colby and the members of her class all that she seeks by the present suit. Penney argues that in effect Mrs. Colby was a member of a class represented by the EEOC and that not having opted out she is bound by the outcome of the class action. We disagree, however, apart from the fact that since the appeal from the Detroit decision is pending, that decision is not final for purposes of allowing a defense of res judicata to be sustained in the present suit.
Mrs. Colby relies heavily on General Telephone Co. v. EEOC, 446 U.S. 318, 64 L. Ed. 2d 319, 100 S. Ct. 1698 (1980), where the Supreme Court held that the EEOC, when it brings a suit seeking injunctive relief and backpay for a group of employees, is not required, and cannot be compelled, to seek class certification under Rule 23. Such a certification would bar additional litigation by members of the class unless they opted out and the certification was under a provision of Rule 23 that permits opting out. But the Court said that Rule 23 "has no application to" a suit by the EEOC. Id. at 324. The Court was "unconvinced that it would be consistent with the remedial purpose of the statutes to bind all 'class' members with discrimination grievances against an employer by the relief obtained under an EEOC judgment or settlement against the employer." Id. at 333. It is true that this passage assumes that the EEOC has won rather than lost the suit, at least to the extent of obtaining a settlement, but we cannot see what difference ...