Petition for Writ of Certiorari — AT&T Technologies, Inc. v. Blim
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g4-72 0 [TSS
JUL 16 1984
CLERK
IN THE
Supreme Court of the United States
OCTOBER TERM, 1984
AT&T TECHNOLOGIES, INC.,
Petitioner,
Vv.
RAYMOND C. BLIM, ET AL.,
Respondents.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR
THE TENTH CIRCUIT
WILLIAM D. CURLEE PAUL M. THOMPSON
LYTLE, SOULE, CURLEE CHRISTINE H. PERDUE
HARRINGTON, CHANDLER & HUNTON & WILLIAMS
VAN DYKE Post Office Box 1535
2210 First National Center 707 East Main Street
Oklahoma City, Oklahoma 73102 Richmond, Virginia
(405) 235-7471 (804) 788-8200
Counsel for Petitioner
QUESTIONS PRESENTED
1. Whether the court below erred in refusing to evaluate
proferred statistical evidence under the Hazelwood-Casta-
neda standards because the case was tried to a jury rather
than to the court alone.
2. Whether a jury in a case alleging individual disparate
treatment based on age discrimination may properly be in-
structed that statistical evidence alone can be determinative
of the ultimate issue of discriminatory intent.
3. Whether the judgment and opinion of the court of
appeals should be vacated because of the court’s failure to
consider and rectify an error in jury instructions on the
burden of proof under the Age Discrimination in Employ-
ment Act which reversed the role of the jury and judge and
affected the substantial rights of the parties.
TABLE OF CONTENTS
Page
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REASONS FOR GRANTING THE WRIT ............... 7
1. The Decision Below Conflicts in Principle With the Decisions
of this Court and Other Courts of Appeals Setting Forth
Guidelines for the Consideration of Statistical Evidence in
Employment Discrimination Cases ................4.. 7
2. The Decision Below So Far Departed from the Usual and
Accepted Course of Judicial Proceedings as to Justify This
Court’s Exercise of its Power of Supervision ............ 13
3. The Decision Below Raises Critical and Recurring Ques-
tions Concerning the Role of Judge and Jury in Employment
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APPENDICES
A. Opinion of the Court of Appeals ................ App. 1
B. Opinion of the District Court ................... App. 15
C. Order of the Court of Appeals Denying a Rehearing
and Suggestion for Rehearing En Banc ........... App. 27
iti
TABLE OF AUTHORITIES
Cases
Page
American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d
Se Cr ED 60.6.6 0-6. 66 006 cde dete when deseens 14
Baer Brothers Land & Cattle Co. v. Palmer, 158 F.2d 278
tf 2 rr re rer rrr rrrrs Te er 14
Board of Trustees of Keene State Teachers College v. Sweeney,
a OT, ee TT Ter TTT Tere eee 17
Castaneda Vv. Partida, 430 U.S. 482 (1977) ............45. 8
Construction Aggregate Transport, Inc. v. Florida Rock Indus-
tries, Inc., 710 F.2d 752 (1lth Cir. 1983) .............. 10
Cornecticut Mutual Life Insurance Co. v. Wyman, 718 F.2d
GB. CI Ge Be 4 bb nom och ncn ccnva cas ued coctnna 14, 15
Cooper v. University of Texas at Dallas, 648 F.2d 1039 (Sth
ee. | | errr Terr TS TTT Ter TT? TTT Try Tre. 10
EEOC v. Federal Reserve Bank of Richmond, 698 F.2d 633
(4th Cir. 1983), rev’d. on other grounds, Sub nom. Cooper
v. Federal Reserve Bank of Richmond, ____. U.S. —___.,
&. ££ " kao, | Ree aRanlin “pean 8,9, 10
Eastern Air Lines, Inc. v. McDonnell-Douglas Corp., 532 F.2d
Se Cee GU SD cca erect waednnseviccuseseésne’ 10
Fillippon v. Albion Vein Slate Co., 250 U.S. 76 (1919) ...... 14
Garcia v. Rush Presbyterian-St. Luke’s Medical Center, 660
a Bee. Le. | eyes epee eee bee 10
Gay v. Waiters Union, Local 30, 694 F.2d 531 (9th Cir. 1982) 9, 13
Geller v. Markam, 635 F.2d 1027 (2nd Cir. 1980), cert. denied,
GSE ULE. DES CHBSE) inns cawe ccc ccccccstecunecccues 10
Haddad v. Lockheed California Corp., 720 F.2d 1454 (9th Cir.
BOE icin nnd on conn aes 49.646-500 82 0n0e We nares cannes 11
Haddigan v. Harkins, 441 F.2d 844 (3rd Cir. 1970) ........ 14
Page
Hazelwood School District v. United States, 433 U.S. 299
SEE chews lsc bk cieen We enbaeeecettan cece 7
Herman Schwabe, Inc. v. United Shoe Manufacturing Corp.,
297 F.2d 906 (2nd Cir. 1962), cert. denied, 369 U.S. 865
0 erry Pree Teer ye eer err rs ree Te 9,10
Heward v. Western Electric Co., Inc., No. 83-2293, slip op.
(2s B&R eerie ore 13
Hunziker v. Scheidemantle, 543 F.2d 489, 498 (3rd Cir. 1976) 10
Jamison Co., Inc. v. Westvaco Corp., 526 F.2d 922 (Sth Cir.
SE ki dbhd Gn bckwa bb nbewaendern eee ioe eka 14
Kentroti v. Frontier Air Lines, 585 F.2d 967 (10th Cir. 1978) . 12
Krieg v. Paul Revere Life Insurance Co., 718 F.2d 998 (11th
ee EE 0000 6n66b00ceeneennndeesanukesd eee 12
Lamphere v. Brown University, 685 F.2d 743 (ist Cir. 1982) . 12
Lorillard v. Pons, 434 U.S. 575 (1978) ..............-225. 12
Massarsky v. General Motors Corp., 706 F.2d 111 (3rd Cir.
1983), cert. denied, 104 S.Ct. 348 (1983) .............. 13
Merit Motors, Inc. v. Chrysler Corp., 569 F.2d 666 (D.C. Cir.
POSED -éccesccisdgackéoseoddes ebetsueansieiesasixl 11
McCandless v. United States, 298 U.S. 342 (1936) .......... 14
McDonnell-Douglas Corp. v. Green, 411 U.S. 792 (1973) .5, 12, 17
McPhee v. Reichel, 461 F.2d 947 (3rd Cir. 1972) .......... 15
New York City Transit Authority v. Beazer, 440 U.S. 568
ER See eee ren pee ne aaa eee 15, 16
Pace vV. Southern Ry., 701 F.2d 1383 (11th Cir.), cert. denied,
ee ic ee ED 5 ca nib we 6eed vad ends ceekeenenn 8
Payne Vv. Travenol Laboratories, 673 F.2d 798 (Sth Cir. 1982),
One. GHEE, GSP . Bees CUSED os 6 sca scinccccu¥ecas 13
Page
Peques Vv. Mississippi State Employment Service, 699 F.2d 760
(5th Cir. 1983), cert. denied, 104 S.Ct. 482 (1983) ...... 13
Perreil v. FinanceAmerica Corp., 726 F.2d 654 (10th Cir.
rte ae rt ae ey ee 14
Person v. J. S. Alberici Construction Co., 640 F.2d 916 (8th
+ 2 | PP verrrer rrr TTerTT TTT er Sree e eT 12
Proctor & Gamble Manufacturing Co. v. Fisher, 449 U.S. 1115
CRDEED 600 cc cecd Ud cbensdecck be 665esebbeeeeawbabes 17
Rivera v. City of Wichita Falls, 665 F.2d 531 (Sth Cir. 1982). 9
Stendebach v. C.P.C. International, Inc., 691 F.2d 735 (Sth Cir.
1982), cert. denied, 103 S.Ct. 2122 (1983) ............. 8
Texas Department of Community Affairs v. Burdine, 450 U.S.
Bee CHROED vvcencecdececeeeseceeeseetenecenes jbwere 11,17
United States v. Sowards, 370 F.2d 87 (10th Cir. 1966) ..... 9
United States Postal Service Board of Governors v. Aikens,
— US. Ss § 3 §) eee 12, 17
Ward v. Westland Plastics, 541 F.2d 1266 (9th Cir. 1980) ... 12
Washington Hospital Center v. Butler, 384 F.2d 331 (D.C. Cir.
DED cv ccacckiaassneubeaheankeueuas bes~ceeeeeenet 10
Zahorik Vv. Cornell University, 729 F.2d 85 (2nd Cir. 1984) .. 12
Other Authorities
BB ULBG.. © TAROT) ov ccccosvasccsccnccssesccccsssesses 2
Age Discrimination in Employment Act, as amended, 29 U.S.C.
Ue Gy 0 on 0.0605:064 006 06e 005 bse aeeEeeeceeuehs 2
Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C.
TPO 3 Siecaccncavecccndes b6de66s604660RNUSS 7
GB Wiles GOON ceca ccecccccccdcckadecccccsececsasé 18
ee, PTT TTT Tee 11
IN THE
Supreme Court of the United States
OCTOBER TERM, 1984
AT&T TECHNOLOGIES, INC..,
Petitioner,
Vv.
RAYMOND C. BLIM, MORRIS E. KINGHORN,
J. F. VUKASOVIC, RALPH V. OLDHAM,
STANLEY L. BOARTS, EUGENE FIRESTONE,
WALLACE S. REPETTO, and LARRY N. STEWART,
Respondents.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR
THE TENTH CIRCUIT
The petitioner AT&T Technologies, Inc. respectfully
prays that a writ of certiorari i.sue te review the judgment
and opinion of the United States Court of Appeals for the
Tenth Circuit entered in this proceeding on April 3, 1984.
OPINIONS BELOW
The majority and concurrirg and dissenting opinions of
the Court of Appeals (Pet. App. A) are reported at 731
F.2d 1473 (10th Cir. 1984); the Order of the Court of
Appeals denying en banc rehearing (Pet. App. C) is not
yet published. The opinion of the United States District
Court for the Western District of Oklahoma (Pet. App. B)
is reported at 496 F. Supp. 818 (W.D. Okla. 1980).
2
JURISDICTION
The judgment of the Court of Appeals was entered April
3, 1984. A timely petition for rehearing and suggestion for
rehearing en banc was denied by the Court of Appeals on
May 8, 1984. On June 20, 1984 the Tenth Circuit stayed
its mandate pending filing of a petition for certiorari on or
before July 16, 1984. This Court’s jurisdiction is invoked
under 28 U.S.C. § 1254(1).
STATUTE
The statute involved is the Age Discrimination in
Employment Act, as amended, 29 U.S.C. § 621 ef seq.
(“ADEA”).
STATEMENT OF THE CASE
On September 8, 1978, eight employees of AT&T Tech-
nologies, Inc.’s (“AT&T-TI’s”) Oklahoma City works’
brought this action under the ADEA alleging that AT&T-TI
had failed to repromote them to section chief positions be-
cause of age. The eight plaintiffs were former section chiefs
who had been demoted to non-supervisory positions during
a reduction in force in 1974 and 1975.
Following a jury trial in March 1980 limited to the issue
of liability a jury verdict was entered in favor of each indi-
vidual plaintiff on the repromotion claims. A second trial
on damages was held before the district court sitting with-
out a jury, and on September 5, 1980, the court entered
judgment against AT&T-TI in the amount of $901,440.78."
Both parties offered statistical evidence at trial analyzing
When the complaint was filed, the Oklahoma City plant was
owned by Western Electric Co., Inc. Western Electric’s name was
changed to AT&T Technologies, Inc. in 1984.
? The award included front pay, back pay, a lump sum annuity
for social security losses, damages for lost purchasing power on
3
promotions of employees in the age group protected by the
ADEA. The plaintiffs’ expert, Heyward P. White, presented
two sets of exhibits. In the first, he argued that AT&T-TI’s
performance appraisals were biased by age. Although the
exhibits did not show on their face results of any statistical
testing, White testified he had applied a statistical analysis
called the “goodness of fit” test from which he concluded
that considering 1975 appraisals by age, ninety-seven per-
cent of the time a closer fit to uniform distribution would
be expected. (J.A. 647).*° Based on this conclusion, White
testified to the jury that he “was 97 percent certain that the
appraisal ratings were not distributed without regard to
age.” (J.A. 633, 648).
In the second group of exhibits, White purported to
show a relationship between age and repromotion. He lim-
ited his analysis to repromotions of former section chiefs,
thereby excluding 69 of the 101 promotion decisions made
during the relevant period for which former section chiefs,
including plaintiffs, were in competition. Applying a “good-
ness of fit” and probability test to the thirty-two decisions
which he considered, White testified that based on a prob-
ability statistic of ninety-nine percent, he was able to con-
clude with “(a)bout 99 percent certainty” that younger
employees had received preference in promotions. (J.A.
657).
AT&T-TI presented uncontradicted evidence that, apply-
ing both a .05 probability standard and a s:andard deviation
analysis to all the 101 promotion decisions during the rele-
vant period, none of the promotion figures showed selection
back wages, damages for payment of additional income taxes on
the award, liquidated damages in an amount equal to each of the
enumerated items of damages, and $175,000 in attorneys’ fees.
*“J.A.” references are to pages of the Joint Appendix filed in the
Court of Appeals. “E.” references are to the volume of the Joint
Appendix containing exhibits.
4
rates based on age within statistically significant ranges.
AT&T-TI also presented raw data showing that during the
1974-1979 period in which promotion decisions were chal-
lenged, the number of section chiefs aged thirty-nine and
under declined by half, from 124 to 62, while their percent-
age of the section chief group declined from 43.5% to
26.6%. (E. 177). During the same period, section chiefs
aged forty and over increased in absolute numbers from
161 to 171 and in percentage representation from 56.5%
of the total to 73.4%. (E. 177).
In closing argument, plaintiffs’ counsel argued to the
jury that while AT&T-TI’s statistician might not infer bias
from a probability of a chance occurrence greater than five
percent, the jury was entitled to do so. (J.A. 1072).* In
reference to the expressions of “certainty” of the plaintiffs’
expert, counsel told the jury, “You just couldn’t explain a
97 or so per cent certainty when you look at those figures
if it wasn’t willful age discrimination.” (J.A. 1133).
The trial court overruled AT&T-TI’s objections to the
plaintiffs’ statistical evidence, and in submitting the case to
the jury, refused AT&T-TI’s requested instructions setting
forth legal standards to be used by the trier of fact in weigh-
ing statistical evidence. Instead, the court gave only a gen-
eral instruction on the weight to be accorded expert testi-
mony. In a separate instruction, however, the court charged
the jury that statistical evidence could establish the ultimate
fact in issue.”
* Referring to a probability statistic of 84% plaintiffs’ counsel
argued that “only sixteen out of a hundred times would you get the
kind of age discrimination on promotions.” (J.A. 1072). Later he
stated, “It seems to me that 97 percent certainly is pretty persuasive.”
(J.A. 1091).
°In reference to indirect evidence of discrimination, the judge
advised the jury that “Other evidence, including statistical evidence,
can establish these elements, as well as the ultimate issue, if the
5
The plaintiffs’ claims were tried as individual disparate
treatment cases, and in formulating its instructions to the
jury, the trial court accordingly applied the standards on
burden of proof set forth in McDonnell-Douglas Corp. v.
Green, 411 U.S. 792 (1973). The trial judge intended to
charge the jury that he had determined that AT&T-TI had
satisfied its burden of articulating legitimate reasons for the
promotion decisions in question, the issue for the jury being
whether plaintiffs had carried their ultimate burden by
proving pretext. (J.A. 102). In reading the charge to the
jury, however, the judge misread the instruction, stating
instead that “It is for the jury in this case to determine
whether defendant has stated a legitimate reason... .” (em-
phasis added). (J.A. 1149).
Prior to retirement of the jury, the error was brought to
the trial judge’s attention and exception taken by AT&T-TI’s
counsel. The trial judge’s response was an apparent refer-
ence to the jury’s possession of a copy of the instructions in
the jury room: “Well, they are going to have these with
them and if they need them it will clear it up.” (J.A. 1157).
The jury was never read the correct instruction nor was it
advised that an error had been made.
AT&T-TI timely filed an alternative motion for judg-
ment notwithstan ing the verdict or for new trial, in which
it argued that a new trial was warranted on rumercus
grounds, including admission of improper and prejudicial
statistical evidence and expert testimony, plaintiffs’ coun-
sel’s closing argument, and errors in the jury instructions.
The motion was overruled without opinion.
AT&T-TI noted its appeal on September 12, 1980. Briefs
were timely filed, and oral argument was heard by a panel
jury believes that it shows that a plaintiff was not repromoted be-
cause of his age.” (emphasis added. )
6
of the Tenth Circuit on October 1, 1981. On June 13, 1983,
on its own motion and without explanation, the court va-
cated the oral argument and submission of the case. A sec-
ond oral argument was heard on August 3, 1983. The
court’s opinion affirming the: jury verdict on liability and
reversing in part the damages and fee awards issued on
April 3, 1984. Chief Judge Seth filed a separate concurring
and dissenting opinion criticizing the majority opinion’s
failure to decide that front pay is an impermissble remedy
under the ADEA.
AT&T-TI contended on appeal that the plaintiffs’ expert
testimony was not probative under the standards set forth
in controlling decisions of this Court and prejudicially mis-
stated the conclusions properly deducible from statistical
analysis. The majority opinion did not reach the merits of
these contentions, holding only that “Whether the evidence
supported the plaintiffs’ statistical conclusions and what
weight should be accorded to those statistics are issues for
the jury.” 731 F.2d at 1477. Similarly, the district court’s
failure to instruct the jury on standards for consideration
of statistical evidence and the misreading of the charge were
not discussed. The opinion treated all issues relating to jury
instructions in one sentence: “The standards were followed
by the trial court and the trial court correctly instructed the
jury.” 731 F.2d at 1477.
AT&T-TI filed a timely petition for rehearing and sug-
gestion for rehearing en banc, noting the omission of any
discussion in the opinion of issues which had been expressly
taised as grounds for appeal, including those relating to the
statistical evidence and the jury instructions. The Petition
was denied without discussion of these issues on May 8,
1984.
7
REASONS FOR GRANTING THE WRIT
1. The Decision Below Conflicts in Principle With the Decisions
of this Court and other Courts of Appeals Setting Forth Guide-
lines for the Consideration of Statistical Evidence in Employment
Discrimination Cases.
Under the decision of the Court of Appeals, a jury is
free to consider statistical evidence which does not satisfy
minimal] standards of probative value established in em-
ployment discrimination cases and to base its ultimate find-
ing of discriminatory intent on such evidence alone. This
result is irreconcilable with the principles set forth in Hazel-
wood School District v. United States, 433 U.S. 299 (1977),
and with the body of law developed in the lower courts gov-
erning the evaluation of statistical evidence. The Court of
Appeals’ justification for its decision, that the jury is to de-
cide both the weight to be accorded to statistical evidence
and whether an expert’s conclusions have evidentiary sup-
port, would render Hazelwood a nullity whenever an em-
ployment discrimination case is tried to a jury rather than
to a judge.
A. In Hazelwood, a Title VII’ action alleging a pattern
and practice of racial discrimination, this Court held that
the statistical comparison employed by the district court,
which compared Hazelwood’s teacher work force to its
student population, “fundamentally misconceived the role
of statistics in employment discrimination cases.” 433 U.S.
at 307. The proper comparison was between the teaching
staff and the qualified teacher population in the relevant
labor market. Because the district court had not adequately
considered factors determinative of the relevant labor mar-
ket, the case was remanded for further findings. “And
* Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C.
§ 2000e, et seq.
8
only after such a determination is made can a foundation
be established for deciding whether or not Hazelwood en-
gaged in a pattern or practice of racial discrimination in its
employment practices in violation of the law.” /d. at 312-i3.
In reliance upon Castaneda v. Partidu, 430 U.S. 482,
496 (1977), the Court in Hazelwood also approved the
use of a standard deviation analysis as a precise method of
measuring the significance of statistical disparities. 433
U.S. at 309, n. 14. As a general rule, where large samples
are concerned, if the difference betwen the expected value
and the observed number is greater than two or three
standard deviations, the null hypothesis that race was not
considered would be suspect. 433 U.S. at 307.
Hazelwood’s emphasis on an appropriate comparison,
on a factually supportable determination of the relevant
labor pool, and or a proper methodology for evaluating
Statistical disparities has been echoed in subsequent de-
cisions by the courts of appeals. The courts have been care-
ful to require that an expert’s selection of the number of
decisions subjected to statistical analysis be based upon a
sufficient factual foundation and not be arbitrarily limited
“to obtain a desired result,” EEOC v. Federal Reserve
Bank of Richmond, 698 F.2d 633, 649-50 (4th Cir. 1983),
rev'd. on other grounds, sub nom. Cooper v. Federal Re-
serve Bank of Richmond, US. , 35 F.E.P. Cases
1 (1984); that the statistical evidence present proper com-
parisons and be based on appropriate pools and samples,
Pace v. Southern Ry., 701 F.2d 1383 (11th Cir.), cert. de-
nied, 104 S.Ct. 549 (1983); Stendebach v. C.P.C. Inter-
national, Inc., 691 F.2d 735 (Sth Cir. 1982), cert. denied,
103 S.Ct. 2122 (1983); and, absent disparities egregious
on their face (e.g., che “inexorable zero”), that a claim
either of a “marked disproportion” or a “gross disparity” be
supported by a demonstration of statistical significance un-
9
der the Hazelwood-Castaneda guidelines or some other rec-
ognized statistical methodology. EEOC v. Federal Reserve
Bank of Richmond, 698 F.2d at 648; Rivera v. City of
Wichita Falls, 665 F.2d 531, 535 (Sth Cir. 1982).
Each of these principles was ignored by the court below
out of an excessive deference to the jury’s role in weighing
the evidence. Moreover, because of the court’s erroneous
view of the role of judge and jury, it also permitted expert
testimony which grossly exceeded the boundaries dictated
by statistical analysis. Where evidence indicates statistically
significant results, the determination of legal significance
remains an issue for the fact-finder and not the expert wit-
ness. EEOC vy. Federal Reserve Bank of Richmond, 698
F.2d at 648. Most importantly, rebuttal of the null hypo-
thesis does not in and of itself demonstrate discriminatory
intent: “Simply put, statistics demonstrating that chance is
not the more likely explanation are not by themselves suffi-
cient to demonstrate that race is the more likely explanation
for an employer's conduct.” Gay v. Waiters Union, Local
30, 694 F.2d 531, 553 (9th Cir. 1982).
The court’s holding that it is for the jury to determine if
the evidence supported the plaintiffs’ statistical conclusions
is in addition error as a matter of law. It is the responsibility
of the trial judge in the first instance to insure that an ex-
pert’s conclusions have evidentiary support, and if they do
not, to exclude them or to submit them under a limiting in-
struction. United States v. Sowards, 370 F.2d 87, 92 (10th
Cir. 1966); Herman Schwabe, Inc. v. United Shoe Manu-
facturing Corp., 297 F.2d 906, 912 (2nd Cir. 1962), cert.
denied, 369 U.S. 865 (1962); Fed R. Evid. 703. The re-
quirement of a sufficient factual foundation for the admis-
sion of expert testimeny applies to statistical evidence in
employment discrimination cases as in any other area of the
law. EEOC v. Federal Reserve Bank, supra; Garcia v.
10
Rush Presbyterian-St. Luke’s Medical Center, 660 F.2d
1217 (7th Cir. 1981); Cooper v. University of Texas at
Dalias, 648 F.2d 1039 (Sth Cir. 1981).
The federal courts have long recognized the trial court’s
special responsibility “to scrutinize most carefully unusually
technical or complicated expert testimony” presented to a
jury. Eastern Air Lines, Inc. v. McDonnell Douglas Corp.,
532 F.2d 957, 999-1000 (Sth Cir. 1976).
The District Court must do more than merely weigh
the probative value of an expert’s testimony consid-
ered as a whole. Where practical, a trial judge should
exclude particular assumptions or other aspects of an
expert’s testimony which considered individually do
not meet the “minimum of probative value.” Herman
Schwabe, Inc. v. United Shoe Manufacturing Corp.,
supra, 297 F.2d at 912. This more detailed scrutiny
is necessary because some telling errors may become
virtually unreviewable once the jury has returned its
verdict.
Id. Accord, Construction Aggregate Transport, Inc. V.
Florida Rock Industries, Inc., 710 F.2d 752, 789 (11th
Cir. 1983); Hunziker v. Scheidemantle, 543 F.2d 489, 498
(3rd Cir. 1976); Washington Hospital Center v. Butler,
384 F.2d 331, 335 (D.C. Cir. 1967); Herman Schwabe,
Inc. v. United Shoe Manufacturing Corp., supra at 912.
See also, Geller v. Markam, 635 F.2d 1027, 1033-34 (2nd
Cir. 1980), cert. denied, 451 U.S. 945 (1981) (upholding
exclusion of statistical evidence from the jury in a trial
under the ADEA).
Failure to subject statistical evidence in this case to a
“more detailed scrutiny” led directly to the jury’s considera-
tion of evidence lacking in minimal probative value. The
plaintiffs’ expert was allowed to testify concerning an
11
analysis based on less than a third of the actual number of
decisions in issue, and to advise the jury that his probability
findings based on that limited analysis, rather than merely
rejecting the null hypothesis, amounted to mathematical
certainties that discrimination had occurred.
Such testimony was a distortion of the conclusions prop-
erly reachable through statistical analysis and grossly over-
reached the bounds of proper expert testimony. Rule 703,
Fed. R. Evid.’ Had this case been tried to the court alone,
the district judge would not have been free to disregard the
standards of Hazelwood and subsequent decisions by reli-
ance on such evidence. The court cannot abandon these
standards simply because the case is tried to a jury. Indeed,
greater safeguards are warranted because of the often con-
fusing and, as here, misleading nature of statistical evidence.
See Haddad v. Lockheed California Corp., 720 F.2d 1454
(9th Cir. 1983).
B. The error resulting from failure to apply the Hazel-
wood standards to the evaluation of the statistical evidence
was compounded by the jury instructions.
Because this case concerned individual claims that
AT&T-TI had failed to promote each plaintiff because of
his age, plaintiffs were required to prove intentional dis-
crimination in order to prevail. Texas Department of Com-
munity Affairs v. Burdine, 450 U.S. 248 (1981); In@’l.
Brotherhood of Teamsters v. United States, 431 U.S. 324
(1977).° Direct evidence of discriminatory intent is not
* Fed. R. Evid, 703 requires that the facts or data relied on by
an expert be “of a type reasonably relied on by experts in the par-
ticular field in forming opinions or inferences upon the subject.”
Where the grounds are not reasonably reliable, the court may ex-
clude the testimony under this rule. Merit Motors, Inc. v. Chrysler
Corp., 569 F.2d 666, 673 (D.C. Cir. 1977).
® The Tenth Circuit has expressly held that the standards of proof
in Title VII disparate treatment cases are applicable to claims under
12
necessary; as in any lawsuit, the plaintiff may prove his
case by direct or circumstantial evidence. United States
Postal Service Board of Governors v. Aikens, ___. US.
_, 103 S. Ct. 1478, 1481, n. 3 (1983).
The use of statistics as circumstantial evidence in dis-
parate treatment cases presents unique problems. Statistics
necessarily focus upon treatment of the group, whereas in
a disparate treatment case, the legal focus is upon treatment
of the individual. Thus statistical data will often have no
direct bearing on the ultimate issue of discriminatory intent
in a particular decision to discharge, hire or promote. Lim-
itations on the usefulness of statistics in these circumstances
were recognized by this Court in McDonnell-Deouglas Corp.
v. Green, 411 U.S. at 805, n. 19, where the Court observed
that general statistical determinations, “while helpful, may
not be in and of themselves controlling as to an individual-
ized hiring decision, particularly in the presence of an other-
wise justifiable reason for refusing to rehire.”
Subsequent to McDonnell-Douglas, the appellate courts
have held that proof of statistical imbalances, even if other-
wise probative, is not determinative of the issue of dis-
criminatory intent in an individual case. Regardless of sta-
tistics, “the issue remains in these cases whether a particular
isolated historical event was discriminatory.” Ward v. West-
land Plastics, 651 F.2d 1266 (9th Cir. 1980). Accord,
Zahorik v. Cornell University, 729 F.2d 85, 95 (2nd Cir.
1984); Lamphere v. Brown University, 685 F.2d 743, 749
(ist Cir. 1982); Person v. J. S. Alberici Construction Co.,
640 F.2d 916, 919 (8th Cir. 1981). The same principle
has applied in disparate treatment cases under the ADEA.
Krieg v. Paul Revere Life Insurance Co., 718 F.2d 998
the ADEA. Kentroti v. Frontier Air Lines, 585 F.2d 967 (10th Cir.
1978). See also, Lorillard v. Pons, 434 U.S. 575 (1978).
13
(11th Cir. 1983); Massarsky v. General Motors Corp., 706
F.2d 111, 118 (3rd Cir.), cert. denied, 104 S.Ct. 348
(1983); see also, Heward v. Western Electric Co., Inc.,
No. 83-2293, slip op. at 9-10 (10th Cir. July 3, 1984)
(ADEA case noting that it is “well established that the use
and significance of statistical evidence differs depending on
whether the case alleges disparate treatment or disparate
impact” and requiring “gross” disparities to establish a
prima facie case in a disparate treatment class or pattern
& practice suit) .°
The instructions to the jury in the instant case were di-
rectly contrary to these decisions. As a result, the jury was
permitted to give controlling weight to the statistical evi-
dence, despite AT&T-TI’s articulation of “an otherwise jus-
tifiable reason” for its promotion decisions with respect to
each plaintiff. When considered in light of the trial court’s
failure to apply the Hazelwood standards either to admis-
sion of the statistical evidence or to its assessment by the
jury, the instruction permitted an ultimate determination of
discriminatory intent to be based on statistical evidence
which did not satisfy minimum standards of probative value.
2. The Decision Below So Far Departed from the Usual and Ac-
cepted Course of Judicial Proceedings as to Justify This Court’s
Exercise of its Power of Supervision.
It has long been the rule of this Court that “in jury trials
erroneous rulings are presumptively injurious, especially
those embodied in instructions to the jury; and they furnish
® Individual disparate treatment cases have been distinguished
from pattern and practice actions, in which the appellate courts have
followed Hazelwood and Teamsters in concluding that purposeful
discrimination may be shown by a sufficiently gross statistical dis-
parity. Peques v. Mississippi State Employment Service, 699 F.2d
760 (Sth Cir.), cert. denied, 104 S.Ct. 482 (1983); Payne v.
Travenol Laboratories, 673 F.2d 798 (Sth Cir.), cert. denied, 459
U.S. 1038 (1982); Gay v. Waiters Union, Local 30, supra.
14
ground for reversal unless it affirmatively appears that they
were harmless.” Fillippon v. Albion Vein Slate Co., 250
U.S. 76, 82 (1919); see also, McCandless v. United States,
298 U.S. 342, 347-48 (1936) (“an erroneous ruling which
relates to the substantial rights of a party is ground for re-
versal unless it affirmatively appears from the whole record
that it was not prejudicial.” )
The trial court’s erroneous instruction, which resulted in
contradictory instructions to the jury on the burden of
proof, unquestionably relates “to the substantial rights of
a party.” The Tenth Circuit expressly so held in an opinion
under the ADEA issued just two months before the decision
in this case. Perrell vy. FinanceAmerica Corp., 726 F.2d 654
(10th Cir. 1984). In Perrell, a jury instruction on the bur-
den of proof under the ADEA was challenged. Finding that
the instruction “did not clearly articulate the essence of the
law” and that it could not “conclusively determine that the
effect of the erroneous instruction was harmless,” the court
reversed the judgment below. 726 F.2d at 656, 657. In so
doing, it articulated standards applicable to consideration
of errors in instructions on the burden of proof under the
ADEA:
The standard of proof formulation is key to the under-
standing of liability under the ADEA. Thus, the er-
roneous instruction given in this case relates to the
substantial rights of the defendant below. This error
requires reversal unless this court can determine that
the error was not prejudicial.
726 F.2d at 656-57."°
2° In cases arising Outside the ADEA, the courts of appeals have
consistently held that errors in instructions on the burden of proof
or material points of law are fundamental errors which require
reversal. American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725
F.2d 1350, 1358 (Fed. Cir. 1984); Connecticut Mutual Life In-
15
A conclusion that the error below was not prejudicial
cannot rest on an assumption that the jury applied the
correct standard, either by disregarding a portion of the
oral charge, or, as the trial judge in this case apparently
anticipated, by reading the written instructions.
When the correctness or adequacy of a jury instruction
is at issue, an appeilate court may not review the
evidence in the iight most favorable to the verdict
winner. There can be no deference to a factual finding
tainted by legal error. If the jury was misled as to the
law on a material point, “we cannot presume that the
jury applied the appropriate standard in deciding (an
issue).
Connecticut Mutual Life Insurance Co. v. Wyman, 718
F.2d at 65. To cure an error in instructions, the correction
must be “in clear and unmistakeable terms.” Baer Brothers
Land & Cattle Co. v. Palmer, 158 F.2d 278, 281 (10th
Cir. 1946). Reliance on the jury’s possession of written in-
structions is insufficient. Jamison Co., Inc. v. Westvaco
Corp., 526 F.2d 922 (Sth Cir. 1976); Haddigan v. Harkins,
441 F.2d 844 (3rd Cir. 1970).
In this case the appellate court refused to consider and
rectify an error affecting the substantial rights of the
parties, properly preserved below and expressly raised on
appeal." This refusal was without explanation and is in-
consistent with the decisions of this Court, the Tenth Cir-
cuit’s own precedents, and the consistent practice of the
surance Co. v. Wyman, 718 F.2d 63, 65 (3rd Cir. 1983); McPhee
v. Reichel, 461 F.2d 947, 951 (3rd Cir. 1972).
™ The failure of the court of appeals to consider the merits of
the error in jury instructions presents no impediment to this
Court’s consideration of the issue, especially since the issue was
“fully aired” below and “involves the application of settled legal
principles to uncontroversial facts.” New York City Transit Au-
thority Vv. Beazer, 440 U.S. 568, 583, n. 24 (1979).
16
courts of appeals. Prompt and complete correction of
erroneous instructions is prerequisite to a fair trial, par-
ticularly when the erroneous instructions relate to the bur-
den of proof. The Tenth Circuit’s unexplained departure
from the normal procedure of considering and deciding
claims of error affecting the substantial rights of the parties,
combined with the crucial importance of accurate instruc-
tions on the burden of proof, merits the exercise of this
Court’s supervisory power to grant this petition and re-
verse the decision below. New York Transit Authority v.
Beazer, supra note, at 15.
3. The Decision Below Raises Critical and Recurring Questions
Concerning the Role of Judge and Jary in Employment Dis-
crimination Cases.
AT&T-TI was grossly prejudiced by the unregulated
admission of the plaintiffs’ statistical evidence in this case.
The issue is a broader one, however, that involves the
interplay between the law of employment discrimination as
it has developed in non-jury trials and the traditional role
of the jury in assessing circumstantial evidence. Unwar-
ranted deference to the jury’s role will result, as in this case,
in a jury’s consideration of non-probative statistical evi-
dence unenlightened by guidance or limiting instructions
from the court. Not only is a “detailed scrutiny” required
by the trial judge, it must be a scrutiny informed by the
judicial standards which have developed for consideration
of statistical evidence.
These standards should not differ depending upon
whether the case is tried by a judge or a jury. Uniformity
of decision-making is nowhere more important than in the
application of federal statutes for the enforcement of civil
rights. “The blind use of statistics cannot be permitted to
17
undermine the policies of Congress or erode our decisions
on substantive law.” Proctor & Gamble Manufacturing Co.
v. Fisher, 449 U.S. 1115, 1118 (1981) (Rehnquist, J.,
dissenting from denial of writ of certiorari). Just as a de-
fendant’s rights should not be noticeably different depend-
ing upon the judicial circuit in which his case is heard, so
should his rights not differ because a jury rather than a
judge is the fact-finder.
These same considerations apply to the burden of proof.
If the jury in the instant case followed the trial court’s oral
instructions by making an independent determination of
the sufficiency of the defendant’s stated reasons for its pro-
motion selections, it could well have rendered a verdict for
plaintiffs without consideration of the crucial “factual in-
quiry” of intentional discrimination. See United States
Postal Service Board of Governors v. Aikens, supra, This
is a particular danger because the jurors are unlikely to
have appreciated the legal distinction between “legitimate
reasons” sufficient to satisfy the defendant’s burden of
production and to create a jury issue, and “pretextual rea-
sons” sufficient for the plaintiffs to carry their ultimate
burden of proving liability. The effect of misreading the
instruction was to generate confusion on the very point the
instructions were intended to clarify.
This Court has been at pains to delineate in a series of
cases the precise nature of the order and burden of proof
applicable in employment discrimination cases tried under
Title VII. See, United States Postal Service Board of Gov-
ernors V. Aikens, supra; Texas Department of Community
Affairs v. Burdine, supra; Board of Trustees of Keene State
Teachers College v. Sweeney, 439 U.S. 24 (1978); Mce-
Donnell-Douglas Corp. v. Green, supra. When courts apply
these same standards to jury trials under the ADEA, equal
18
if not greater scrutiny is required io insure that issues are
submitted to juries pursuant to a correct formulation of the
law.
Given the proliferation of jury trials in cases under the
ADEA and 42 U.S.C. § 1981 which mimic Title VII in the
nature and standards of proof, the issues raised by the de-
cision below are significant and likely to recur. Guidance
by this Court is necessary to insure consistency in the appli-
cation of standards of proof in the federal courts.
CONCLUSION
For these reasons, a writ of certiorari should be issued to
review the judgment and opinion of the Tenth Circuit.
Respectfully submitted,
PAUL M. THOMPSON
CHRISTINE H. PERDUE
HUNTON & WILLIAMS
Post Office Box 1535
707 East Main Street
Richmond, Virginia 23212
WILLIAM D. CURLEE
LYTLE, SOULE, CURLEE
HARRINGTON, CHANDLER & VAN DYKE
2210 First National Center
Oklahoma City, Oklahoma 73102
Counsel for Petitioner
July 16, 1984
19
CERTIFICATE OF SERVICE
I, Christine H. Perdue, counsel for the Petitioner, and a
member of the Bar of the Supreme Court of the United
States, hereby certify that I have served all parties required
to be served by depositing three copies of the foregoing
Petition for Writ of Certiorari and Appendix thereto in the
United States Mail, first class postage prepaid, this 16th
day of July, 1984, addressed to: Philip F. Horning, Esquire
and James R. Moore, Esquire, Horning, Johnson & Grove,
1800 City National Bank Tower, Oklahoma City, Okla-
homa 73102; and Howard K. Phillips, Clerk, United States
Court of Appeals for the Tenth Circuit, Denver, Colorado
80294.
CHRISTINE H. PERDUE
Counsel for Petitioner
APPENDIX A
United States Court of Appeals
TENTH CIRCUIT
No. 80-1973
RAYMOND C. BLIM, MORRIS E. KINGHORN,
J. F. VUKASOVIC, RALPH V. OLDHAM,
STANLEY L. BOARTS, EUGENE FIRESTONE,
WALLACE S. REPETTO, and LARRY N. STEWART,
Plaintiffs-A ppellees,
v.
WESTERN ELECTRIC COMPANY, INC.,
Defendant-A ppellant.
Appeal from the United States District Court
for the Western District of Oklahoma
(D. C. Civil No. 78-0977-E)
Paul M. Thompson (Christine H. Perdue also of Hunton
& Williams, Richmond, Virginia, and William D. Curlee of
Lytle, Soule, Curlee, Harrington, Chandler & Van Dyke,
Oklahoma City, Oklahoma, with him on the brief) for De-
fendant-Appellant.
James R. Moore and Philip F. Horning (Judson M. Fink
with them on the brief) of Horning, Johnson & Grove, Okla-
homa City, Oklahoma, for Plaintiffs-Appellees.
Before SETH, Chief Judge, BREITENSTEIN and LOGAN,
Circuit Judges.
PER CURIAM. Filed April 3, 1984
App. 2
Eight individual plaintiffs brought this action against
Western Electric alleging violations of the Age Discrimina-
tion in Employment Act of 1967 (ADEA). Prior to 1974
all eight plaintiffs were section chiefs at Western’s Okla-
homa City office. Due to a reduction in work force during
1974 and 1975 they were demoted to nonsupervisory posi-
tions. Beginning in October 1976, Western began to in-
crease the number of section chiefs through promotions
and repromotions of previously demoted supervisors. No
plaintiff has been repromoted to section chief except Mr.
Kinghorn who was repromoted on March 21, 1979. The
plaintiffs claim that they were not repromoted because of
age discrimination practiced by the defendant.
The jury found for the plaintiffs at trial. By special inter-
rogatory the jury also found that the violations of ADEA
were willful in each instance. The defendant made timely
alternative motions for a new trial and judgment notwith-
standing the verdict. The court denied both motions.
In a separate trial for damages the court entered a judg-
ment for the plaintiffs in the amount of $901,440.78. This
sum included back pay, front pay, a lump sum annuity for
social security losses, damages for lost purchasing power
on back wages, damages for losses due to payment of addi-
ticnal income taxes, and liquidated damages in an amount
equal to each of the enumerated items of damages. Also,
the trial court awarded $175,000 in attorney’s fees.
The defendant appeals on numerous grounds, but we
comment only on the primary issues, which are (1) whether
the plaintiffs’ evidence was properly admitted; (2) whether
the evidence supported the verdict; and (3) whether the
award of damages and attorney’s fees was proper and
reasonable.
The defendant claims that the trial court abused its dis-
App. 3
cretion by admitting into evidence certain reports and testi-
mony. The admission of evidence is discretionary with the
trial court and will not be disturbed on appeal unless ciearly
erroneous. Keen v. Detroit Diesel Allison, 569 F.2d 547
(10th Cir. 1978). There is no indication in the record that
the trial court abused its discretion in admitting the Moore
Report, the Conover Report, the testimony of Gerald Hol-
lingsworth, or the statistical data presented by the plaintiffs’
expert.
The Moore Report is an internal Department of Labor
document that memorialized a conversation between 2 DOL
investigator, G. VanDiver Moore, and the Equal Oppor-
tunity Coordinator at Western Electric, Audrey Burns. The
document concerned the possibility of reconciliation be-
tween the defendant and the plaintiffs. The court properly
admitted the report pursuant to Federal Rules of Evidence
803(6) and 803(8). Audrey Burns testified about the con-
versation and carefully reviewed the document for the jury,
outlining phrases, words, and attitudes with which she did
not agree. There could be some serious doubt as to the
admissibility of the Moore Report had it not been so fully
tested and developed through the testimony of the witness
Burns, the Equai Opportunity coordinator for Western
Electric, who had provided much of the information. This
presented to the jury the source of the information and its
context. The trial court has the discretion of balancing the
prejudicial effect with the probative value. Texas Eastern
Transmission V. Marine Office, Etc., 579 F.2d 561 (10th
Cir. 1978). We find no abuse of discretion.
The Conover Report is a report prepared by the defend-
ant concerning the average age of engineers in the company.
The report considered age to be a factor in unit costs and
productivity. The defendant claims that the evidence was
App. 4
collateral and highly prejudicial. The report was admitted
as evidence of an overall company policy of age discrimina-
tion. The court gave a limiting instruction to-the jury advis-
ing them of the weight to be afforded to the report. The
report was properly admitted. See Texas Eastern Transmis-
sion V. Marine Office, Etc., 579 F.2d 561 (10th Cir. 1978),
and John McShain, Inc. v. Cessna Aircraft Co., 563 F.2d
632 (3d Cir. 1977).
Gerald Hollingsworth was the affirmative action officer
for the defendant during the time of the reduction in force
and the alleged discrimination. He testified that the defend-
ant’s sister company, Southwestern Bell Telephone Com-
pany (SW3), was interested in hiring only younger white
male section chiefs from Western. As a result of SWB’s
request, a number of younger employees were laterally
transferred into SWB, and were therefore not demoted or
terminated in the subsequent reduction in work force at
Western. The defendant claims the evidence is irrelevant
and highly prejudicial. The court denied the defendant’s
objection to the Hollingsworth testimony. The evidence was
offered to show motive for the transfer and the protection
of a particular group. We find no error.
The defendant also claims that plaintiffs’ statistical evi-
dence lacked a sufficient factual foundation. Both the plain-
tiffs and defendant presented statistical data to the jury for
consideration. We find no basis for the assertion that it was
error to admit the evidence. Both parties developed a rea-
sonable basis in the evidence for their respective statistical
studies. The data and the methods were tested on cross-
examination. The objections of the appellant appear to be
directed in large part to the weight to be given the studies.
Whether the evidence supported the plaintiffs’ statistical
conclusions and what weight should be accorded to those
App. 5
statistics are issues for the jury. Laugesen v. Anaconda
Co., 510 F.2d 307, 317 (6th Cir. 1975). Therefore, the
trial court properly admitted the data.
The defendant argues that the trial court erred in deny-
ing its motion for judgment notwithstanding the verdict. In
reviewing the evidence under prevailing standards in this
circuit we find no error.
In this ADEA action the plaintiffs must make a prima
facie showing that the defendant’s failure to repromote
them was due to unlawful age discrimination. Then the
burden shifts to the defendant to rebut the presumption of
discrimination by producing evidence that the plaintiffs
were not repromoted for a legitimate, nondiscriminatory
reason. The plaintiffs then have the ultimate burden of per-
suasion by showing that a discriminatory reason more likely
motivated the employer or that the employer’s proffered
explanation is merely a pretext. Texas Department of Com-
munity Affairs vy. Burdine, 450 U.S. 248 (1981); Mistretta
v. Sandia Corp., 649 F.2d 1383 (10th Cir. 1981). The
standards were followed by the trial court and the trial court
correctly instructed the jury.
The plaintiffs presented testimony, statistical data, and
circumstantial evidence tending to prove the defendant’s
discriminatory conduct. The defendant provided statistical
data and testimony from the plaintiffs’ supervisors tending
to prove that the plaintiffs lacked sufficient job performance
records to be promoted. We must conclude that the jury,
considering all the evidence and with all reasonable infer-
ences, could properly find that the defendant failed to
repromote the plaintiffs because of unlawful age discrimina-
tion. Therefore, the trial court properly denied the defend-
ant’s motion for a judgment NOV and motion for a new
trial.
App. 6
The defendant claims the trial court erred by awarding
damages to the plaintiffs in the form of front pay, lost pur-
chasing power, compensation for increased tax liability, an
annuity for lost social security benefits, and liquidated
damages.
The trial court awarded each plaintiff front pay from
the date of judgment to the date of their respective pro-
jected dates of retirement. The amount equalled the differ-
ence between the salary being received at the time the judg-
ment was entered and what each plaintiff would have made
until the assumed retirement dates had they been repro-
moted. The plaintiffs originally requested the equitable
remedy of repromotion to their desired section chief posi-
tions. However, at trial they indicated that they would
prefer front pay damages over repromotion. Apparently all
the plaintiffs except Mr. Kinghorn remain employed at
Western Electric in nonsupervisory positions.
The district court has the equitable power to repromote
the plaintiffs under the ADEA, 29 U.S.C. § 626(b). The
trial court must exercise its discretion in awarding equitable
remedies in light of the objectives of the statute being en-
forced. Hecht Co. v. Bowles, 321 U.S. 321, 331 (1944).
The district court’s decision not to order offers of reinstate-
ment must be measured against the purposes of the ADEA.
Albemarle Paper Co. v. Moody, 422 U.S. 405, 417 (1975).
The ADEA has a broad purpose of insuring that “older
individuals who desire to work will not be denied employ-
ment opportunities solely on the basis of age.” H.R. Rep.
No. 950, 95th Cong., 2d Sess., reprinted in [1978] U.S.
Code Cong. & Ad. News 504. Therefore, equitable remedies
fashioned by the trial court which further the intent, pur-
pose and language of the ADEA should be upheld.
In EEOC v. Sandia Corp., 639 F.2d 600 (10th Cir.
App. 7
1980), we found that the trial court did not abuse its dis-
cretion by ordering offers of reinstatement even though
some plaintiffs previously stated that they would not accept
reemployment with the defendant. We pointed out that re-
instatement has the dual purpose of protecting the dis-
charged employee and demonstrating the employer’s good
faith to the other employees. EEOC v. Sandia Corp., 639
F.2d 600, 638 (10th Cir. 1980). Although preferences ex-
pressed by the parties may heip the trial court fashion ap-
propriate remedies, the determination of equitable remedies
rests with the court. The court’s judgment should be guided
by sound legal principles. Albemarle Paper Co. v. Moody,
422 U.S. 405, 416 (1975).
In Albemarle the Supreme Court pointed out that a dis-
trict court may deny an equitable remedy permitted by a
federal statute if it does not frustrate the central purpose
of that statute. Since the trial court’s decision must be ex-
amined in light of the statute’s intent and purposes, the trial
court should express its reasons for denying the equitable
relief. Albemarle Paper Co. v. Moody, 422 U.S. 405, 421
(1975),
The only reason stated by the trial court for not repro
moting the plaintiffs was that they preferred damages. The
court said:
“The plaintiffs were ready, willing and able to serve as
Section Chiefs on the dates of the first promotions and
repromotions and have been so up to the present time,
although each at trial expressed a preference for ‘front
pay’ in lieu of reinstatement.”
The ADEA enforcement section, 29 U.S.C. § 626(b),
provides for both equitable and legal remedies.
Assuming, without deciding, that a court may award
front pay under the ADEA, compare Cancellier v. Fed-
App. 8
erated Department Stores, 672 F.2d 1312, 1319 (9th Cir.
1982), cert. denied, 103 S. Ct. 131, with Kolb v. Goldring,
Inc., 694 F.2d 869, 874 n.4 (1st Cir. 1982), we conclude
that the trial court erred in granting front pay in the instant
case. Reinstatement is the preferred remedy under the
ADEA. The focus of the congressional statement of pur-
pose is on the continuing employment of older workers.
See 29 U.S.C. § 621. Thus, reinstatement best serves Con-
gress’ purpose in enacting the ADEA. Furthermore, an
award of front pay is always somewhat speculative. We
therefore hold that courts should order reinstatement under
the ADEA whenever it is an appropriate remedy.
In the instant case, the only reason that the trial court
gave for awarding front pay rather than repromotion is that
plaintiffs preferred damages. Standing alone plaintiffs’ pref-
erence for damages clearly does not justify awarding front
pay rather than reinstatement. Repromotion is particularly
appropriate in the instant case. An atmosphere of hostility
does not appear to exist between plaintiffs and defendant.
All plaintiffs still work for defendant; all have been section
chiefs, the position to which they would be repromoted. The
Western Electric plant where plaintiffs work employs many
section chiefs, and vacancies in that position are frequent.
We hold that the trial court erred in granting front pay in-
stead of reinstatement.
The trial court also erred in granting an award for lost
purchasing power. Prejudgment interest and an award for
lost purchasing power serve the same purpose, and if one
is barred, the other should be barred as well. Saunders v.
Claytor, 629 F.2d 596, 598 (9th Cir. 1980), cert. denied,
450 U.S. 980 (1981); Blake v. Califano, 626 F.2d 891,
895 (D.C. Cir. 1980).
In Brooklyn Bank v. O’Neil, 324 U.S. 697, 715 (1945),
App. 9
the Supreme Court held that prejudgment interest was not
available under the Fair Labor Standards Acts because
liquidated damages, which at that time were mandatory
under the FLSA’, compensated plaintiffs for any delay. The
ADEA incorporates 29 U.S.C. § 216(b), the FLSA pro-
vision for liquidated damages. Liquidated damages are avail-
able under the ADEA, however, only when there is a willful
violation. 29 U.S.C. §626(b). The Ninth Circuit has held
that liquidated damages under the ADEA are therefore
punitive. Kelly v. American Standard, Inc., 640 F.2d 974,
979 (9th Cir. 1981). In a later ADEA case the Ninth Cir-
cuit granted both prejudgment interest and liquidated dam-
ages. Criswell v. Western Airlines, Inc., 709 F.2d 544 (9th
Cir. 1983). The court cited Kelly for the proposition that
“liquidated damages and prejudgment interest serve differ-
ent purposes in making ADEA plaintiffs whole.” Jd. at 556.
We think that the legislative history undercuts that court’s
reasoning. The House Conference Report on the 1978
amendments to the ADEA states, “The ADEA .. . does not
provide remedies of a punitive nature.” H. Conf. Rep. No.
95-950, 95th Cong. 2d Sess. 13, reprinted in 1978 US.
Code Cong. & Ad. News 528, 535. Thus, we agree with
the circuits that still regard Brooklyn Bank as pertinent and
hold that prejudgment interest is not available under the
ADEA if plaintiffs receive liquidated damages. Gibson v.
Mohawk Rubber Co., 695 F.2d 1093, 1102 (8th Cir. 1982)
(plaintiffs not entitled to both prejudgment interest and
liquidated damages absent exceptional circumstances);
Kolb v. Goldring, Inc., 694 F.2d 869, 875 (1st Cir. 1982).
See also Hodgson v. Miller Brewing Co., 457 F.2d 221,
229 (7th Cir. 1972) (both prejudgment interest and liqui-
~- 1A 1947 amendment to the FLSA makes liquidated damages
discretionary in FLSA cases if the employer shows that he acted in
good faith. See 29 U.S.C. § 260.
App. 10
dated damages not available under the FLSA); McClana-
han v. Matthews, 440 F.2d 320, 325-26 (6th Cir. 1971)
(FLSA). Thus, the award for lost purchasing power was
erroneous.
The district court also erred in awarding damages to
plaintiffs for increased tax liability caused by the receipt of
damages in a lump sum. The back pay’ will be paid in a
single year, reported in that year, and taxed at the rates
then in effect. See Driscoll vy. Exxon Corp., 74-1 U.S.T.C.
q 9440 (S.D.N.Y. 1974); Rev. Rul. 78-336, 1978-2 C.B.
255. However, the tax laws contain five-year averaging pro-
visions that will eliminate nearly all of any penalty that
would otherwise result from receipt of a lump sum payment.
See LR.C. §§ 1301-05. We are unsure whether liquidated
damages are taxable,’ but if so the five-year averaging pro-
visions would also apply to these sums. Because plaintiffs
will suffer no significant tax penalty, the court’s award for
increased tax liability was improper.
The trial court also awarded plaintiffs damages for
loss of Bell Systems Savings Plan and social security bene-
fits. Fringe benefits are proper damages under the ADEA.
H. Conf. Rep. No. 95-950, 95th Cong. 2d Sess. 13, re-
printed in 1978 U.S. Code Cong. & Ad. News 528, 535.
On appeal defendant makes no argument that the award
for the Bell Systems Savings Plan losses was improper. We
cannot determine whether reinstatement will fully restore
plaintiffs’ social security entitlements. To the extent that
repromotion will nc fully restore: plaintiffs’ entitlements to
2 Back pay is taxable to the plaintiffs and subject to income tax
and social security withholding. Freeman y. Blake Co. 84 F. Supp.
700, 704 (D. Mass. 1949); Rev. Rul. 55-203, 1955-1 C.B. 114.
*’ Amounts paid for liquidated damages and attorney’s fees are
not remuneration for employment and thus not subject to tax with-
holding. Rev. Rul. 80-364, 1980-2 C.B. 294.
=e
App. 11
social security benefits, plaintiffs are entitled to compensa-
tion for their loss.
The ADEA relies on the Fair Labor Standards Act for
computation of liquidated damages. See 29 U.S.C. § 216(b).
That section provides:
“Any employer who violates the provisions of section
206 or section 207 of this title shall be liable to the
employee or employees affected in the amount of their
unpaid minimum wages, or their unpaid overtime com-
pensation, as the case may be, and in an additional
equal amount as liquidated damages.”
Section 626(b) directs courts to substitute “amounts
owing to a person” under the ADEA for “unpaid minimum
wages” and “unpaid overtime compensation” when applying
§ 216(b) to calculate liquidated damages under the ADEA.
The House Conference Report on the 1978 amendments to
the ADEA states that liquidated damages are “calculated
as an amount equal to the pecuniary loss” and cites “wages,
fringes and other job related benefits” as examples of pe-
cuniary loss. H. Conf. Rep. No. 95-950, 95th Cong., 2d
Sess. 13, reprinted in 1978 U.S. Code Cong. & Ad. News
528, 535. Thus, the liquidated damages award should be
equal to the award for back pay and loss of Bell Systems
Savings Plan benefits, and any award for social security
benefits that will not be restored by repromotion.
The defendant claims that the trial court erred in award-
ing attorney’s fees of $175,000. The trial court’s findings
of fact and conclusions of law do not set out its rationale
for the award. The Supreme Court and this Court have
established the criteria for determining reasonable attorney’s
fees. See Blum v. Stenson, 52 U.S.L.W. 4377 (U.S. Mar.
21, 1984); Hensley v. Eckerhart, ... U.S. ..., 103 S. Ct.
1933 (1983); Ramos v. Lamm, 713 F.2d 546 (10th Cir.
App. 12
1983). Since we have changed the award on appeal, the
trial court should reexamine the matter of fees on remand.
The judgment is affirmed in part, reversed in part, and
the case is remanded for further proceedings in accordance
herewith.
80-1973—BLIM v. WESTERN ELECTRIC COMPANY,
INC,
SETH, Chief Judge, concurring and dissenting:
I would decide the issue as to whether “front pay” is a
permissible remedy under the Act as this is the basic issue
presented on appeal. Front pay was awarded by the trial
court, and I would hold that this was not a remedy con-
templated by the ADEA. Kolb v. Goldring, Inc., 694 F.2d
869 (1st Cir.).
It must be recognized that the equitable jurisdiction of
a federal court should be flexibly and broadly construed to
afford complete relief in light of the statutory purposes.
Mitchell v. DeMario Jewelry, 361 U.S. 288. However, such
equitable powers cannot be used to expand or override the
limited legal remedies available under the ADEA. The Con-
gress very clearly distinguishes between the legal and equita-
ble remedies available under the ADEA. See Lorillard v.
Pons, 434 U.S. 575, 583. Allowing front pay runs against
the intent of Congress in limiting legal remedies to “un-
paid wages and unpaid overtime compensation.” The court
should not use its equitable powers to frustrate the intent
of the statute. See Vazquez v. Eastern Air Lines, Inc., 579
F.2d 107 (1st Cir.).
The legal remedies under the ADEA consist of “unpaid
App. 13
minimum wages and unpaid overtime compensation,” thus
“items of pecuniary or economic loss such as wages, fringe,
and other job-related benefits.” H.R. Rep. No. 950, 95th
Cong., 2d Sess., reprinted in [1978] U. S. Code Cong. &
Ad. News 504, 535.
Liquidated damages may be recovered when the violation
is willful. Liquidated damages are designed to compensate
the plaintiff for non-pecuniary losses or highly speculative
pecuniary losses. Liquidated damages are a significant fac-
tor in this analysis of damages.
The front pay damages are too uncertain to be considered
“lost wages” or “lost earned benefits.” The possibilities of
promotions, legitimate demotions, terminations, or death
inject too many unknowns. In these circumstances the award
of front pay is too speculative to be considered pecuniary
damages under the statute. The enforcement section of the
ADEA was specifically constructed to limit the type of avail-
able damages. As mentioned, although the statute grants
broad equitable powers those powers cannot be used to ex-
pand the legal remedies specifically detailed in the statute.
It should be noted that this court has allowed “front pay”
damages in some Title VII discrimination cases. See United
States v. Lee Way Motor Freight, Inc., 625 F.2d 918 (10th
Cir.), and Fitzgerald v. Sirloin Stockade, Inc., 624 F.2d
945 (10th Cir.). Title VII is not the designated statutory
model for damages under the ADEA. In light of the specific
language of the ADEA and the FLSA it is not appropriate
to analogize to Title VII for determination of damages. For
a discussion of the difference between the ADEA and the
FLSA see Lorillard v. Pons, 434 U.S. 575, 584.
I would not decide, as does the majority, that it was error
to award front pay because reinstatement is the “preferred
remedy.” I do not agree that reinstatement should be or-
App. 14
dered “whenever it is an appropriate remedy,” as the ma-
jority states, if this means that such a remedy has some
priority or is preferred, or there is some presumption. The
Act does not create any such priorities and the matter is
best left to the trial court with the usual standard of review.
The trial courts are in a better position to decide whether
reinstatement will accomplish the purposes of the Act. If
there is a choice between “appropriate” remedies the trial
court should make it. We do not know the status of the
parties in the case before us at this late date nor their rela-
tionship with other employees and superiors.
I would thus decide the front pay issue presented to us
on the law and the facts and not decide that something else
is preferred.
As to attorney fees, the analysis and the proof would
seem to be controlled by the Supreme Court’s decision in
Bluz v. Stenson, .... U.S. ...., 52 U.S.L.W. 4377, which
would secin to restrict a multiplication of factors to be con-
sidered.
APPENDIX B
App. 15
United States Bistrirt Cout
WESTERN DISTRICT OF OKLAHOMA
No. CIV-78-0977-E
RAYMOND C. BLIM, MORRIS E. KINGHORN,
J. F. VUKASOVIC, RALPH V. OLDHAM,
STANLEY L. BOARTS, EUGENE FIRESTONE,
WALLACE S. REPETTO, and LARRY N. STEWART,
Plaintiffs,
v.
WESTERN ELECTRIC CO., INC.,
a New York corporation,
Defendant.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Philip F. Horning, James R. Moore and Linda King
of Horning, Johnson & Grove, 1800 City National Bank
Tower, Oklahoma City, OK 73102, for Plaintiffs.
William D. Curlee of Lytle, Soule & Emery, 2210
First National Center, Oklahoma City, OK 73102, for
Defendant.
Before LUTHER B. EUBANKS, United States District
Judge.
App. 16
BACKGROUND
The above entitled case was bifurcated and the liability
portion came on for trial on March 3, 1980, through March
11, 1980, and was tried to the court and jury, with Philip F.
Horning and James R. Moore appearing as attorneys for
plaintiffs, and William D. Curlee appearing as attorney for
defendant. The jury found the defendant liable to all plain-
tiffs for age discrimination in its verdict of March 11, 1980,
for failure to repromote plaintiffs to Section Chief. By spe-
cial interrogatory, the jury also found said discrimination
willful as to each plaintiff.
On August 13, 1980, through August 15, 1980, the dam-
ages portion of the case was tried to the court, with the
same counsel appearing for the same parties. On August 29,
1980, further evidence was heard with respect to the pension
benefits issue and also with respect to attorney fees, and
further arguments were heard on several legal issues. After
hearing and considering all the evidence of the parties, all
of the legal authorities submitted, and being fully advised
herein, the court now makes the following findings of fact
and conclusions of law with regard to the damages owed by
defendant to plaintiffs.
FINDINGS OF FACT
1. At the time of the daimages portion of the trial, each
plaintiff's age, years with the company, time in grade as a
Section Chief prior to demotion, date of demotion from
Section Chief, and percent of control (relating to salary)
at demotion, was as follows:
A. RAYMOND C. BLIM, age fifty-five (55), fifteen (15)
years as a Section Chief, thirty-two (32) years with the
App. 17
company, demoted April 28, 1975, percent of control
102.25.
B. Morris E. KINGHORN, age fifty-four (54), seventeen
(17) years as a Section Chief, thirty (30) years with the
company, demoted April 15, 1975, percent of control
105.56.
C. J. F. VuKASovIc, age fifty-seven (57), fifteen (15)
years as a Section Chief, thirty-nine (39) years with the
company, demoted April 15, 1975, percent of control
107.64.
D. RALPH V. OLDHAM, age sixty-one (61), five (5)
years as a Section Chief, twenty-nine (29) years with the
company, demoted April 28, 1975, percent of control
102.15.
E. STANLEY L. Boarts, age fifty-nine (59), thirteen
(13) years as a Section Chief, twenty (20) years with the
company, demoted April 28, 1975, percent of control
103.33.
F. EUGENE FIRESTONE, age sixty-one (61), nine (9)
years as a Section Chief, thirty-four (34) years with the
company, demoted June 1, 1974, percent of control 104.71.
G. WALLACE E. REPETTO, age fifty-seven (57), five (5)
years as a Section Chief, thirty-four (34) years with the
company, demoted April 1, 1975, percent of control 99.5.
None of the plaintiffs were ever repromoted to Section Chief
except MORRIS E. KINGHORN, who was repromoted on
March 21, 1979, after the commencement of this action,
with his percent of control lowered to 90 percent.
2. Each plaintiff is presently eligible to retire without
penalty from the defendant company with the exception of
plaintiff BOARTS, who will be so eligible in October 1980.
The planned retirement date of each plaintiff is as follows:
App. 18
Plaintiff BLIM, August 26, 1981.
Plaintiff KINGHORN, February 16, 1988.
Plaintiff VUKASOVIC, April 15, 1981.
Plaintiff OLDHAM, March 10, 1981.
Plaintiff BOARTS, March 31, 1981.
Plaintiff FIRESTONE, March 1, 1981.
. Plaintiff REPETTO, June 12, 1981.
. After the demotions of plaintiffs and others, the de-
fendant company began promotions and repromotions to
the level of Section Chief on October 11, 1976, when it
promoted seven (7) employees to Section Chief who had
never held that position previously. Their ages were thirty-
four (34), thirty-four (34), thirty (30), thirty (30), thirty-
eight (38), twenty-nine (29) and thirty (30)—all younger
than KINGHORN, the youngest plaintiff. On that same
day, defendant repromoted five (5) employees who had
previously held the position of Section Chief, four (4) of
whom were younger than KINGHORN.
4. On December 20, 1976, defendant made its next
series of promotions and repromotions to Section Chief
when it promoted six (6) employees who had never held
that position previously. Their ages were thirty-four (34),
thirty-eight (38), forty-three (43), forty-one (41), twenty-
nine (29) and thirty-six (36)—all younger than KING-
HORN. On that same day. defendant repromoted two (2)
employees who had previously been a Section Chief, one (1)
of whom was younger than KINGHORN.
5. The plaintiffs were ready, willing and able to serve as
Section Chiefs on the dates of the first promotions and re-
promotions and have been so up to the present time, al-
though each at trial expressed a preference for “front pay”
in lieu of reinstatement.
OmMMOOW >
od
App. 19
6. The willful discrimination found by the jury com-
menced against plaintiffs on October 11, 1976, and said
date should be used as the “start date” for lost back wages
suffered by the plaintiffs. In calculating lost wages for the
plaintiffs, the percent of control element in the wage calcu-
lation should be that percent of control assigned to each
plaintiff at the time of his demotion. The parties have agreed
as to the point value per job and base constant elements of
the wage calculation for the plaintiffs.
7. Due to the willful age discrimination of the defendant
company, each of the plaintiffs has suffered lost back wages,
lost “front wages,” lost contributions and earnings on the
Bell Systems Savings Plan, lost social security benefits, lost
purchasing power on back wages, and loss in the form of
additional income taxes which will be paid upon the dam-
age award herein due to the bunching of said damages in
the form of income into one taxable period. Said damages
are set out specifically in No. 9 herein.
8. That in addition to the foregoing, the plaintiffs should
be restored to their rightful place with respect to pension
rights with the defendant company, and in this regard it has
been offered by the defendant that in the event this judg-
ment is finally upheld the company volunteers to and urges
this court to allow each plaintiff such pension, if and when
he becomes entitled to start receiving one, as he would have
been awarded had he been restored to the position of Sec-
tion Chief on October 11, 1976, at the percent of control
held by each plaintiff at the time of his original demotion,
and continued in such capacity to the date he became eligi-
ble to start receiving a pension. The court believes that this
remedy is superior to and more accurate than any monetary
award could possibly be and therefore will direct that no
lump sum award be made for loss of pension benefits but
App. 20
that the agreement of the company to make pension pay-
ments as aforesaid be formally ordered.
9. Each plaintiff has suffered damages in the categories
set cut as follows:
Raymond C. Blim
Income Tax
Amount Effect
Lost Wages, until 8/13/80 ...... $ 20,829.12 $ 5,207.28
Lost Wages, from 8/13/80 (without
allowance for inflation) ....... 6,133.03 1,533.26
Loss of participation in Bell System
SOUMNE FUME oc ccc cescocces 859.11 214.78
Loss of Social Security Benefits ... 2,653.46 1,220.59
Loss of purchasing power ........ $ 4,559.86 $ 1,139.97
9,315.88
Income taxes, in addition to those
payable, if amounts had been re-
ceived in the normal course of
a ee 9,315.88
44,350.46
Liquidated damages ............ 44,350.46
| Te ey $ 88,700.92
Stanley L. Boarts
Income Tax
Amount Effect
Lost Wages, until 8/13/80 ...... $ 33,876.66 $ 8,469.17
Lost Wages, from 8/13/80 (without
allowance for inflation) ....... 6,115.84 1,528.96
Loss of participation in Bell System
STs ib 6 Ee Sie cc ceces 1,319.00 329.75
Loss of Social Security Benefits ... 2,230.05 1,025.82
Loss of purchasing power ........ 7,224.44 1,806.11
13,159.81
App. 21
Amount
Income taxes, in addition to those
payable, if amounts had been re-
ceived in the normal course of
RE 6 Cavthahweins bxe ees 13,159.81
63,925.80
Liquidated damages ............ 63,925.80
DE bai xdececeaseal $127,851.60
Eugene Firestone
Amount
Lost Wages, until 8/13/80 ...... $ 28,699.65
Lost Wages, from 8/13/80 (without
allowance for inflation) ....... 4,287.35
Loss of participation in Bell System
PE 6 o's Ss Spee enews e 1,062.26
Loss of Social Security Benefits .. . 641.25
Loss of purchasing power ....... 6,242.97
Income taxes, in addition to those
payable, if amounts had been re-
ceived in the normal course of
SE so arebchee cesaunes 10,368.04
51,301.52
Liquidated damages ............ 51,301.52
SES i kee i040 aeweer $102,603.04
Joseph F. Vukasovic
Amount
Lost Wages, until 8/13/80 ...... $ 29,721.32
Lost Wages, from 8/13/80 (without
allowance for inflation) ....... 5,986.03
Income Tax
Effect
Income Tax
Effect
$ 7,174.91
1,071.84
265.57
294.98
1,560.74
10,368.04
Income Tax
Effect
$ 7,430.33
1,496.51
App. 22
Amount
Loss of participation in Bell Systems
Savings Plan ........0seeeee- 1,217.13
Loss of Social Security Benefits . .. 1,547.91
Loss of purchasing power ....... 6,309.02
Income taxes, in addition to those
payable, if amounts had been re-
ceived in the normal course of
EE. Soa vucuvens cevveees 11,520.42
56,301.83
Liquidated damages ............ 56,301.83
errr rrr rey $112,603.66
Morris E. Kinghorn
Amount
Lost Wages, until 8/13/80 ...... $ 20,830.20
Lost Wages, from 8/13/80 (without
allowance for inflation) ....... 20,091.41
Loss of participation in Bell Systems
Savings Plan ......-.seeeeees 1,540.11
Loss of purchasing power ........ 5,313.99
Income taxes, in addition to those
payable, if amounts had been re-
ceived in the normal course of
eer err rrr rT TT 11,943.43
$ 59,719.14
Liquidated damages .........-.- 59,719.14
coy | rer $119,438.28
Income Tax
Effect
304.28
712.04
1,577.26
11,520.42
Income Tax
Effect
$ 5,207.55
5,022.85
384.53
1,328.50
11,943.43
App. 23
Ralph F. Oldham
Amount
Lost Wages, until 8/13/80 ...... $ 18,568.81
Lost Wages, from 8/13/80 (without
allowance for inflation) ....... 3,298.32
Loss of participation in Bell System
GT nadcnadeseccesyes 716.30
Loss of purchasing power ........ 3,965.73
Income taxes, in addition to those
payable, if amounts had been re-
ceived in the normal course of
| RRR RCL a a Eee 6,637.29
33,186.45
Liquidated damages ............ 33,186.45
bib ex os awn vise 02 $ 66,372.90
Wallace S. Repetto
Amount
Lost Wages, until 8/13/80 ...... $ 27,715.44
Lost Wages, from 8/13/80 (without
allowance for inflation) ....... 8,603.06
Loss of participation in Bell System
SEED Go cA civ eeceess... 974.61
Loss of purchasing power ........ 6,255.04
Income taxes, in addition to those
payable, if amounts had been r-
ceived in the normal course of
SE Se bi Vad Cabos catees. 10,887.04
54,435.19
Liquidated damages ............ 54,435.19
TOTAL
$108,870.38
Income Tax
Effect
$ 4,642.20
824.58
179.08
991.43
6,637.29
Income Tax
Effect
$ 6,928.86
2,150.77
243.65
1,563.76
10,887.04
App. 24
10. The damage amounts reflected above for social
security losses are measured by the costs of annuities which
would provide the plaintiffs monthly benefits equal to the
difference between social security benefits they should have
received upon their retirement absent any discrimination
and social security benefits they will actually receive. These
“costs of annuities” discount to present day value the social
security losses taking into consideration mortality and in-
terest earnable and they contemplate the exhaustion of the
award at the end of plaintiffs’ expected life spans. They are
therefore a proper measure of damages.
11. Each plaintiff is entitled to liquidated damages in
an amount equal to the pecuniary damages set out in No. 9
herein:
A. Back Pay;
B. Front Pay, without any allowance for inflation;
C. Loss of Bell System Savings Plan Benefits;
D. Lost Social Security Benefits;
E. Lost purchasing power; and
F. Additional income taxes.
12. Plaintiffs are also entitled to recover from defendant
reasonable attorney fees and costs for the prosecution of
this action and this court finds that a fair and reasonable
attorney’s fee is One Hundred Seventy-Five Thousand Dol-
lars ($175,000.00).
CONCLUSIONS OF LAW
1. This court has jurisdiction of the parties and the
subject matter of this action under the Age Discrimination
in Employment Act (ADEA) 29 U.S.C. § 621, et seq.
Venue is proper herein.
2. The court concludes that plaintiffs are entitled to re-
App. 25
cover lost back pay in the amounts shown above. Loeb v.
Textron, Inc., 600 F.2d 1003 (1st Cir. 1979); Marshall v.
Arlene Knitwear, Inc., 454 F.Supp. 715 (E.D.N.Y. 1978);
Buchholz v. Symons Mfg. Co., 445 F.Supp. 706 (E.D. Wis.
1978), and Rogers v. Exxon Research & Engineering Co.,
404 F.Supp. 324 (D. N.J. 1975), reversed on other grounds,
550 F.2d 834 (3d Cir. 1977).
3. The court concludes that the plaintiffs are entitled to
recover lost Bell Systems Savings Plan benefits as shown
above. Mistretta v. Sandia Corp., [18 EPD 4 8852] (D.C.
N.M. 1978).
4. The court concludes that the plaintiffs are entitled to
recover lost social security benefits in the amounts shown
above. Mistretta v. Sandia Corp., supra, and Buchholz v.
Symons Mfg. Co., supra.
5. The court concludes that the plaintiffs are entitled to
recover their loss in purchasing power on their back wages
due to the non-speculative and mathematically exact impact
of inflation in the amounts shown above. Steckler v. United
States, 549 F.2d 1372 (10th Cir. 1977), DeWeese v. United
States, 419 F.Supp. 170 (D. Colo. 1976), aff'd, 576 F.2d
802 (10th Cir. 1978), and Rowe v. Revlett, Nos.
76-1097-98 (10th Cir., Aug. 22, 1977).
6. The court concludes that the plaintiffs are entitled to
recover tax loss due to th? bunching of their award for
back compensation into one taxable period in the amounts
shown above. DeWeese v. United States, supra; and United
States v. Sommers, 351 F.2d 354 (10th Cir. 1965).
7. The court concludes that the plaintiffs are entitled to
recover in lieu of reinstatement, “front wages” in the
amounts shown above. Loeb v. Textron, inc., supra; Hill v.
Western Electric, 19 FEP Cases 490 (4th Cir. 1979); and
App. 26
Fitzgerald v. Sirloin Stockade, Inc., No. CIV-77-0467-E
(W.D. Okla.}.
8. The court concludes that the plaintiffs are not entitled
to recover prejudgment interest on their lost back wages.
Brooklyn Bank v. O’Neil, 324 U.S. 697 (1945).
9. The court concludes that the plaintiffs are entitled to
recover liquidated damages due to defendant’s willful dis-
crimination under the ADEA in an amount equal to the
damages they recover for lost back wages, front pay, loss of
Bell Systems Savings Plan contributions, loss of social
security benefits, loss of purchasing power, and loss of addi-
tional taxes due to the bunched income affect. Lorillard v.
Pons, 434 U.S. 575, 98 Sup.Ct. 886, 55 L.Ed.2d 40 (1978);
Loeb v. Textren, Inc., supra; Wehr v. Burroughs Corp.,
22 FEP Cases 994 (3d Cir. 1980); and Fellows v. Medford
Corp., 431 F.Supp. 199 (D. Ore. 1977).
10. The court concludes that the plaintiffs are entitled
to recover their reasonable attorney’s fees and costs in the
prosecution of this action. A reasonable fee is found to be
$175,000.00.
11. Prior to this date the court orally advised counsel
for all parties what its decision would be on the contested
issues raised in the damage feature of this trial, and counsel
agreed to compute the dollar amounts due and attempt to
prepare an agreed judgment reflecting said amounts. This
has now been done and an Order of Judgment approved by
both counsel has been presented to the court and is being
entered of even date herewith.
DATED this 5th day of September, 1980.
United States District Judge
APPENDIX C
App. 27
United States Court of Appeals
TENTH CIRCUIT
MARCH TERM—MAY 8, 1984
No. 80-1973
RAYMOND C. BLIM, MORRIS E. KINGHORN,
J. F. VUKASOVIC, RALPH V. OLDHAM,
STANLEY L. BOARTS, EUGENE FIRESTONE,
WALLACE S. REPETTO and LARRY N. STEWART,
Plaintiffs-A ppellees,
Vv.
WESTERN ELECTRIC, INC., a New York
Corporation,
Defendant-A ppellant.
Before Honorable Oliver Seth, Chief Judge, Honorable
Jean S. Breitenstein, Honorable Robert H. McWilliams,
Honorable James E. Barrett, Honorable William E. Doyle,
Honorable Monroe G. McKay, Honorable James K. Logan,
Honorable Stephanie K. Seymour, Circuit Judges
This matter comes on for consideration of:
A. Appellees’ petition for rehearing filed April 17, 1984;
B. Appellant’s petition for rehearing with suggestion for
rehearing en banc filed April 17, 1984.
Upon consideration whereof, it is ordered:
1. The appellees’ petition for rehearing is denied.
2. The appellant’s petition for rehearing is denied by the
App. 28
panel that rendered the decision sought to be reheard. The
petition for rehearing having been denied by the panel that
rendered the decision sought to be reheard, and no member
of the panel nor judge in regular active service on the Court
having requested that the Court be polled on rehearing
en banc, Rule 35, Federal Rules of Appellate Procedure,
the suggestion for rehearing en banc is denied.
3. Appellant complains that the Court never acted on a
motion to supplement the record and correct the appendix.
The motion to supplement and correct is denied by the panel
that rendered the decision in this appeal.
4. Appellant’s petition for renearing informs the Court
that several of the plaintiffs have retired and, hence, cannot
be promoted. It is implicit in our decision that back pay
and other appropriate damages would be paid for the period
prior to repromotion; for those plaintiffs who have retired,
this would mean that they should be paid damages for the
period prior to the retirement. Those claims should be
presented to the District Court on remand.
This order shall be included in the mandate to be issued
to the trial court.
HOWARD K. PHILLIPS, Clerk
ua a
ati
e
8 Ta
Ley
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