Free Memorandum - District Court of Arizona - Arizona

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DANIEL G. KNAUSS United States Attorney District of Arizona SUZANNE M. CHYNOWETH Assistant U.S. Attorney Arizona Bar Number 6835 40 North Central Avenue, Suite 1200 Phoenix, Arizona 85004 Telephone: (602) 514-7500 Facsimile: (602) 514-7760 email: [email protected]

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Alexander Jung, Plaintiff, v. John Potter, Postmaster General, U.S. Postal Service Defendant. Defendant, John E. Potter, pursuant to the Court's November 26, 2007 order (Doc. # 214), CIV-04-0429-PHX-MHM DEFENDANT'S FINAL SUPPLEMENTAL MEMORANDUM RE: EQUITABLE REMEDIES

15 hereby submits his final supplemental briefing regarding the equitable remedies that should be 16 awarded in this case and whether a further evidentiary hearing may be necessary, as set forth 17 below. 18 19 I. BACKGROUND The Court has requested that Defendant file any additional briefing about what equitable

20 remedies should be awarded to Plaintiff, who was awarded $280,000 in compensatory damages 21 by the jury for his Rehabilitation Act Claims, arising between October 2001 and March 2002 in 22 connection with his temporary light duty requests. [Doc. # 181 (verdict form); Doc. # 179, p. 17 23 (jury instructions).] The jury found that Plaintiff's "disability was the sole reason for Defendant's 24 decision to change Plaintiff's work hours with no guarantee of hours and send Plaintiff home or 25 require Plaintiff to use leave on unspecified dates." [Doc. # 181.] Defendant has submitted 26 extensive briefing regarding including the scope of remedies, back pay, which are incorporated 27 by this reference. [Doc. ## 206, 208 (Jt. Report, Def. Supp. Memo., respectively).] This 28 supplemental briefing will provide further discussion about why front pay and reinstatement are

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1 not appropriate, and provide the Court with Defendant's figure for a back pay award, for purposes 2 of this briefing only. (See further discussion below, § II B). Defendant has attached objections 3 to Plaintiff's "exhibits" for purposes of the records. 4 5 A. II. ANALYSIS FRONT PAY/REINSTATEMENT ARE NOT APPROPRIATE EQUITABLE

6 REMEDIES 1/ 7 Front pay "is simply money awarded for lost compensation during the period between

8 judgment and reinstatement or in lieu of reinstatement." Pollard v. E.I. duPont de Nemours & 9 Co., 532 U.S. 843, 846 (2001).
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The same general concepts apply to reinstatement and front

10 pay in this case as have been discussed in Defendant's previous submissions to the Court 11 regarding the appropriate award of back pay. A victim of discrimination must show either an 12 actual or constructive discharge in order to receive the equitable remedy of reinstatement or front 13 pay in lieu of reinstatement. Hertzberg v. Sram Corporation, 261 F.3d 651, 659 (7th Cir. 2001); 14 Doc. ## 206, 208 (Jt. Report, Def. Supp. Memo., respectively).] 15 16 Defendant has argued that based upon the evidence at trial, reinstatement is not appropriate as a matter of law. [Doc. # 208, p. 6, Doc. # 206, pp. 8-10.] It is also important to 17 note that Plaintiff has submitted no evidence that he has been medically cleared to return to his former position. Plaintiff's own physician, Dr. Hiler, who saw Plaintiff on March 13, 2002 and 18 March 20, 2002, opined that Plaintiff could not continue to do his job. [See e.g., Trial Exhibit 43.] 19 2/ Plaintiff has still refused to provide information about the amount, including salary and 20 benefits of his current position. The recent pay stub he did provide does not include important information such as bonuses, overtime, and benefit information. Given that Plaintiff claimed to 21 have been promoted in 2007, it is likely that his earnings would exceed those from 2006, $41,597. 22 3/ Defendant has relied solely upon failure to promote cases to support the proposition that 23 Plaintiff's failure to claim and prove constructive discharge bars his back pay claim beyond September 28, 2002 at the latest. [Pl. Supp. Statement (Doc. # 209), p. 1.] Defendant cited to 24 cases supporting this well established doctrine that are not failure to promote cases, including Walmart, supra, cited in the Parties' Joint Report (Doc. # 206), pp. 16-17; See also,, Id. at pp. 25 5-6; Def. Supp. Memorandum (Doc. #208), pp. 4-5. See also, Spencer v. Wal-Mart, 469 F.3d 311, 317 (3rd Cir. 2006) (Third Circuit held that the trial court properly declined to award back 26 pay in an ADA hostile work environment claim holding that "a successful hostile work environment claim alone, without a successful constructive discharge claim, is insufficient to 27 support a back pay award" and noted that the First, Seventh, Eighth, and Tenth Circuits have 28 2
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(continued...)
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Consequently, for a

1 successful Title VII plaintiff to receive an award of front pay, he must show that the employer's 2 Title VII violation caused his loss of employment. Gotthardt v. National Railroad Passenger 3 Corp., 191 F.3d 1148, 1155 (9th Cir. 1999)(Trial court properly awarded front pay based upon 4 jury's findings that employer engaged in hostile work environment sexual harassment and expert 5 testimony that the hostile environment caused Gotthardt's disability and inability to work.). For 6 example, in Key v. Bender Shipbuilding and Repair Co., Inc., 2000 WL 1005840 (S. D. Ala. July 7 10, 2000), the trial court found that employee Key was not entitled to front pay (or reinstatement). 8 Although the jury agreed that he had been discriminated against when his employer transferred 9 him from a day to night shift position, he lost on his constructive discharge claim and had 10 voluntarily resigned after the transfer. In Key, the district court relied upon two Eleventh Circuit 11 opinions in which the plaintiffs had won on their discrimination claims but lost on their 12 constructive discharge claims. Key at pp. 1-2. In one of these cases, Nance v. Maxwell Feceral 13 Credit Union, 186 F.3d 1338 (11th Cir. 1990), the plaintiff/employee, Nance, was given a choice 14 of being demoted or terminated. Nance took administrative leave the next day and never returned 15 to work, actions found to constitute a voluntary resignation. The Eleventh Circuit reversed the 16 district court's back pay and front pay awards to Nance because the harm was caused by her 17 resignation, not the employer's actions. In Key, the trial court properly followed the Eleventh 18 Circuit precedent for cases in which the employee caused his own economic loss and denied 19 equitable relief, including front pay. 20 The Seventh Circuit has also declined to award equitable remedies to a victim of

21 discrimination who leaves his or her employment but fails to establish actual or constructive 22 discharge. In Hertzberg v. Sram Corporation, 261 F.3d 651 (7th Cir. 2001), the jury found that 23 Hertzberg's employer had engaged in sexual harassment, but not retaliatory discharge. Like 24
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25 reached similar conclusions. Id at n. 6.) Further, while Plaintiff is correct that failure to promote cases are treated differently than other types of discrimination cases for purposes of back pay, 26 he has the concept backwards. Courts may decline to extend the back pay period beyond the end of employment when there is no wrongful or constructive discharge, even in failure to promote 27 cases whereas in other types of employment discrimination cases, the courts require that wrongful discharge be proven. Jurgens v. EEOC, 903 F.2d 386, 390 n. 5 (5th Cir. 1990). 28 3
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(...continued)

1 Jung, Hertzberg had not alleged a constructive discharge claim or other theory for wrongful 2 discharge. Id. at 656. The employer appealed, claiming, in part, that the trial court had 3 improperly awarded equitable damages for lost pay. The Seventh Circuit reversed the lost pay 4 award because "there was no discriminatory discharge on which the award of lost pay could be 5 based." Id. at 661. The Seventh Circuit also pointed out that the Eighth and Tenth Circuits are 6 in agreement that "back pay and front pay may not be recovered in the absence of a finding of 7 discriminatory discharge." Id. at 559 (citations omitted). 8 In Brady v. Wal-Mart Stores Inc., 2005 WL 1521407 (E.D. N.Y. 2005) the district court

9 declined to award back pay because "it would be inequitable to require Wal-Mart to compensate 10 [the employee] for any loss arising from his voluntary decision to leave the company rather than 11 challenging its discriminatory practices while remaining employed there." Id at p. 6. The Brady 12 court further pointed out that the court should consider the entire award to determine if front pay 13 is appropriate., and determined that the punitive and compensatory damages were more than 14 sufficient compensation. 15 In the case sub judice, as previously established, Plaintiff did not allege and did not prove

16 constructive discharge or wrongful termination. [Doc. ## 206, 208 (Jt. Report, Def. Supp. 17 Memo., respectively).] Plaintiff's submissions to the Court state that he is entitled to front pay 18 because his career was "cut short by USPS's violation of Title VII," but Plaintiff nowhere 19 supports these statements. [See e.g. #209, p. 6, ll. 22-25.] There is no evidence that Plaintiff's 20 firing on September 28, 2002 was caused by the discriminatory acts the jury found in connection 21 with his temporary light duty request six months earlier, in March, 2002. Plaintiff was fired 22 because he failed to show up for work after approved medical leave, not because he had medical 23 restrictions or requested light duty. The jury's findings were clearly limited to Defendant's 24 wrongdoing concerning "chang[ing] Plaintiff's work hours with no guarantee of hours and 25 send[ing] Plaintiff home or requir[ing] Plaintiff to use leave on unspecified dates." [Doc. # 181 26 (verdict form).] For the Court to award Plaintiff damages beyond the date of his termination, 27 including reinstatement or front pay, it would have to ignore the jury's limited findings of 28 discrimination and the law requiring a causal connection between the discriminatory acts and the 4
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1 requested equitable remedy. See Bartee v. Michelin North America, Inc., 160 Fed. Appx. 810, 2 813, 2006 WL 30966, p. 3 (10th Cir. 2006) (unpublished). Like the plaintiffs in the cases cited 3 above (as well as those cited in Defendant's previous Memorandum), Jung has not established 4 causation between the Postal Service's discriminatory actions ending in March 2002 and any lost 5 wages, including those for front pay after he was medically unable to work between May 22, 6 2002 and July 1, 2002, failed to return to work on July 1, 2002, or was terminated on September 7 28, 2002. Thus Jung's equitable remedies claim is limited in this case to a back pay award ending 8 on May 22, 2002, July 1, 2002, or September 28, 2002, at the latest­front pay or reinstatement 9 is inappropriate based upon the allegations, evidence and jury findings. 10 11 B. JUNG'S MAXIMUM POSSIBLE BACK PAY AWARD IS $16,021. Defendant disputes many of the unsupported figures and the methodology Plaintiff

12 proposes in his request that the Court award equitable remedies. Further, Plaintiff's figures for 13 2002 are for the entire year. However, Defendant is prepared to suggest a figure for purposes of 14 this Supplemental Memorandum and to avoid the time and expense of an evidentiary hearing. 15 If the Court orders that, at most, Plaintiff is entitled to back pay from the last date he worked or 16 received leave after the light duty offer was rejected, March 8, 2002, until the date of his 17 termination, September 28, 2002, the maximum value of Plaintiff's back pay award for this 18 period, including night time differential, annual leave, holidays, and Thrift Savings Plan, minus 19 2002 interim earnings is $16,021. Plaintiff has already been compensated by the jury for his 20 monetary losses for "moving expenses, job search expenses, medical expenses, psychiatric 21 expenses and the like." [Doc. # 179, p. 21 (jury instructions).] Plaintiff, who has the burden of 22 proof regarding his equitable remedies, has produced no evidence that he suffered any actual loss 23 for the following items: health benefits, basic life insurance, optional life insurance, retirement 24 plan, Social Security and Medicare. Defendant maintains that Plaintiff is not entitled to an award 25 for these alleged benefits, and has not proven as such. 26 The above amounts should also be reduced by half based upon Plaintiff's failure to

27 mitigate his damages by accepting the temporary light duty offer so that he could work at least 28 four hours per shift. [Jt. Report (Doc. # 206), p. 17, Def. Supp. Mem. ( Doc. # 208) pp. 4-5.] 5
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C. INTEREST ON BACK PAY IS LIMITED TO JUDGMENT FUND RATES Jung, without authority, improperly claims that he is entitled to 10% interest rates on any

3 lost pay amounts. [Pl. Supp. Mem. (Doc. # 209, p. 2).] Of course, the trial court's decision to 4 award interest on back pay amount is discretionary. Domingo v. New England Fish Co., 727 F.2d 5 1429, 1446 (9th Cir. 1984). According to Ninth Circuit decisions, pre-judgment interest that is 6 awarded for backpay to successful Title VII should be calculated using the Treasury Bill rate that 7 is used for post judgment interest awards under 28 U.S.C. § 1961. Davis v. City and County of 8 San Francisco, 976 F.2d 1536, 1557-58 (9th Cir. 1992); Northrop Corp. v. Triad Intern. 9 Marketing S.A., 842 F.2d 1154 (9th Cir. 1988). If the Court determines that Jung should be 10 awarded interest on any back pay amount the appropriate rates should be applied. 11 12 III. CONCLUSION Based upon the foregoing, it is requested that the Court determine as a matter of law that
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13 Plaintiff's equitable damages are limited to the time frame from March, 2002 until May 22, 2002, 14 July 1, 2002, or September 28, 2002, at the latest. Defendant has proposed numbers consistent 15 with those proposed by Plaintiff for purposes of these submissions only. Should the Court require 16 additional information for this calculation, Defendant suggests that it be accomplished through 17 the submission of declarations. However, should the Court determine that the scope of equitable 18 remedies should extend beyond September 28, 2002, Defendant requests a full evidentiary 19 hearing, and the right to call expert(s) and other witnesses to establish his position. 20 21 22 23 24 25 26 Effective as of December 21, 2000, 28 U.S. C. 1961(a) was amended so that the applicable interest rate is "the weekly average 1-year constant maturity Treasury yield, as 27 published by the Board of Governors of the Federal Reserve System, for the calendar week 28 preceeding." These rates are much lower than that cited by Plaintiff. For example, the interest rate for the week of March 1, 2002 was 2.28% . 6
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Respectfully submitted this 7th day of December, 2007. DANIEL G. KNAUSS United States Attorney District of Arizona /S/ Suzanne M. Chynoweth SUZANNE M. CHYNOWETH Assistant U.S. Attorney

CERTIFICATE OF SERVICE 8 I hereby certify that on December 7, 2007, I electronically transmitted the attached 9 document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice 10 of Electronic Filing to the following CM/ECF registrants: 11 Rosval A. Patterson 12 777 E. Thomas Rd. Phoenix, AZ 85014 13 s/S. Guerin 14 Office of the U.S. Attorney 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7
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