McClain v. Lufkin Industries, Inc.

McClain v. Lufkin Industries, Inc., is the oldest case on Goldstein Demchak’s docket but is still being actively litigated.  The case is a race discrimination class action brought by African American hourly and salaried employees of Lufkin Industries, Inc., an East Texas oilfield equipment manufacturing company.  Plaintiffs alleged that Lufkin’s subjective employment practices had an unlawful disparate impact on African Americans in initial job assignments and promotions.  The district court certified the class in 1999.  McClain v. Lufkin Industries, Inc., 187 F.R.D. 267 (E.D. Tex., 1999).

In 2005, after a bench trial, the district court entered a judgment which, in addition to finding Lufkin liable for class wide discrimination, found that the class was entitled to back pay in the amount of $3.4 million, ordered Lufkin to cease its discriminatory practices and adopt practices to ensure that African Americans are not discriminated against in initial job assignments, training and promotions, and awarded plaintiffs’ attorneys’ fees, costs and expenses.  Plaintiffs appealed the limited injunctive remedies, the dismissal of plaintiffs’ disparate treatment claims, and reductions in attorneys’ fees.  Lufkin cross-appealed.

On February 29, 2008, in a unanimous decision, a three judge panel of the Fifth Circuit Court of Appeals affirmed the district court’s finding that Lufkin’s subjective decision making had an unlawful disparate impact on promotions of Lufkin’s African American hourly and salaried employees.  See McClain v. Lufkin Industries, Inc., 519 F.3d 264 (5th Cir. 2008).  The panel also reversed the district court’s injunctive relief order agreeing with plaintiffs that it was not specific enough to address the discriminatory practices found by the district court.  The court also affirmed the district court’s formula approach to backpay relief where, as the district court found, it would be impossible to identify which class members were entitled to specific promotions given the passage of time and the myriad decisions at issue.  The court, however reversed the district court’s finding that named plaintiff Sylvester McClain’s EEOC charge was sufficient to support plaintiffs’ initial assignment claim.  It therefore remanded the backpay order to the district court to be recalculated in light of the elimination of the initial assignment claim.  Finally, the court of appeals remanded the district court’s attorneys’ fees award for further factual analysis and findings consistent with Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717–719 (5th Cir. 1974).

Following remand proceedings, the district entered a final Judgment for plaintiffs The Judgment grants extensive injunctive relief, including requiring Lufkin to implement objective and non-discretionary promotional procedures and many other specific measures of affirmative relief; appoints an Ombudsperson for complaints, and authorizes continuing monitoring to assure compliance.  McClain v. Lufkin Industries, Inc., 2010 WL 455351, (E.D. Tex., Jan. 15, 2010).  The Judgment also awards $5.5 million in back pay and interest to the class of over 1,000 African American workers, plus attorneys’ fees and costs.  The court also awarded plaintiffs’ $3.6 million in attorneys’ fees and costs, but calculated Goldstein Demchak’s hourly rates at lower local rates rather than their customary billing rates.  Plaintiffs appealed the fee order and Lufkin cross-appealed from a portion of the back pay award.

On August 8, 2011, a unanimous panel of the Fifth Circuit affirmed the district court’s order on back pay to the class and vacated the district court’s order regarding the hourly rates awarded to Goldstein Demchak finding that, based upon undisputed evidence in the record, the starting point for determining a reasonable fee for Goldstein Demchak is its California billing rates and not the local rates for attorneys in Lufkin, Texas where the case was filed or Beaumont where the case was tried.  McClain v. Lufkin Industries, Inc., 649 F.3d 374 (5th Cir. 2011).  Lufkin subsequently sought rehearing by the Fifth Circuit panel on that part of its order regarding the class back pay.  On September 6, 2011, the Fifth Circuit denied Lufkin’s petition for rehearing.  Lufkin then filed a petition for certiorari with the U.S. Supreme Court, which Plaintiffs will oppose.

On November 14, 2011, the Supreme Court denied a petition for certiorari that was filed by the defendant in McClain v. Lufkin Industries, Inc., a 14 year old race discrimination class action case that Goldstein Demchak has been litigating with Nagocdoches, Texas attorney Timothy B. Garrigan in federal court in Lufkin, Texas.  The denial of Lufkin’s petition means that the approximately $5.5 million in back pay and pre-judgment interest awarded by the district court after trial and affirmed on appeal now may be distributed to the class.

Case Documents