Defendants/appellants the California Public Utilities Commission and various individual employees (collectively “the PUC”) appeal from judgment after a jury verdict awarding (1) plaintiff/appellee Maurice Crommie $151,-920 plus 10% interest and costs, and (2) plaintiff/appellee Arthur Mangold $164,052 plus 10% interest and costs against the PUC for violating the Age Discrimination in Employment Act, 29 U.S.C. §§ 621, et seq. (ADEA), the California Fair Employment and Housing Act, Cal.Gov.Code §§ 12940, et seq. (FEHA), and California common law. The PUC also appeals from the award of $724,380 in attorneys’ fees. We have jurisdiction under 28 U.S.C. § 1291 and we affirm the judgment and fee award, but remand for recomputation of post-judgment interest.
FACTUAL BACKGROUND
These two consolidated cases arise from allegations of age discrimination in promotions by the PUC from the mid-1980s to the early-1990s. Mr. Crommie filed his action in state court October 12, 1989; Mr. Mangold, on February 21, 1989. After the cases were removed, Plaintiffs filed amended complaints, and the cases were consolidated. Meanwhile, the EEOC filed class action suits against the PUC on behalf of 43 other PUC workers who were denied promotion opportunities.
Both plaintiffs are engineers. Mr. Crom-mie had applied for, and was denied, promotion to various regulatory analyst positions from 1983 until 1990 or 1991. Mr. Mangold had applied for, and was denied, supervisor positions from 1986 until 1990. Mr. Crommie began work at the PUC in 1981 at age 54, after extensive experience in the aerospace industry. He has an engineer
Plaintiffs alleged that, beginning as early as 1983, the PUC had a policy and practice of discrimination against older workers for promotions. The discrimination charges were based on promotional examinations that favored younger employees. The promotional process consisted of several steps. After a position was announced, the employee would apply by submitting a self-evaluation. The applicant’s supervisor would comment on the self-evaluation and rate the applicant on a five-point scale. The next-level supervisor would concur or disagree. A promotional readiness examination followed. At issue here are several examinations from 1986 through 1990.
The promotional readiness examinations generally consisted of oral examinations conducted by panels of three or four directors or assistant directors. The questions were subjective. The PUC has argued throughout that the Plaintiffs were not qualified for promotions based on their performance during the examinations. On the other hand, the Plaintiffs’ theory at trial was that the examinations were “fixed” because (1) the subjective questions were based on certain “high profile” assignments or positions that were given to younger employees, (2) they were denied access to these high-profile jobs, (3) supervisor evaluations of older employees were lowered so as to rank younger employees higher, (4) the subjective, “consensus” scoring method was biased, (5) standards and entry requirements were lowered for certain positions to allow younger employees to qualify, and (6) the examination panels were staffed with directors for whom younger employees worked.
After Plaintiffs administratively appealed the promotional decisions, the EEOC investigated and issued determinations of reasonable cause in June of 1989 and April of 1991. In addition to witness testimony and documentary evidence, the EEOC relied on statistics of various examinations showing that the older an employee, the lower the examination score. The EEOC also took issue with some of the questions being asked on the examinations.
The matter was tried before a jury in February and March of 1993. At trial, the Plaintiffs’ evidence consisted of witness testimony, documentary evidence, and statistical evidence of an economics expert, Dr. Betty Blecha. The jury found the PUC itself liable for age discrimination under the ADEA and the California FEHA; found retaliation in violation of the ADEA; found individual defendants William Ahern, Catherine Yap, Jeff O’Donnell, and Ed Texeira liable under FEHA; and found that the PUC and the individuals violated state public policy for failure to promote, and for conspiracy to fail to promote. It awarded damages for loss of earnings, liquidated damages, and emotional distress. The court later awarded attorneys’ fees under state law. The fees totalled $724,380 after applying a contingent-fee multiplier of two. These appeals followed.
DISCUSSION
A. Liability for discrimination under federal law.
The PUC asserts that the trial court prejudicially erred by allowing the Plaintiffs to proceed on a disparate impact theory of discrimination.
“A plaintiff alleging discrimination under ADEA may proceed under two theories of liability: disparate treatment or disparate impact.” Rose v. Wells Fargo & Co.,
*1474 “Disparate treatment” is the most easily understood type of discrimination. The employer simply treats some people less favorably than others because of their race, color, religion, or other protected characteristics. Proof of discriminatory motive is critical, although it can in some situations be inferred from the mere fact of differences in treatment.
Claims that stress “disparate impact” by contrast involve employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by business necessity. Proof of discriminatory motive is not required under a disparate-impact theory.
Hazen Paper Company v. Biggins,
Although the Supreme Court applies disparate treatment to the ADEA, the Court acknowledged in Hazen Paper that it has “never decided whether a disparate impact theory of liability is available under the ADEA, and we need not do so here.” 507 U.S. at -,
Here, the PUC argues that disparate impact is improper in light of Hazen Paper. At least one circuit appears to have so held. See EEOC v. Francis W. Parker School,
We need not address here whether disparate impact is a proper theory under the ADEA because the jury found intentional discrimination under a disparate treatment theory.
If you find that the PUC violated the ADEA federal law and you have calculated plaintiffs’ damages, you must then decide whether the violation was willful. The PUC acted willfully if it intentionally and voluntarily denied promotions to plaintiffs because of age. ... If the PUC willfully violated the law, plaintiffs are entitled to have their damages doubled. This means that you should award them the damages you calculated and add an equal amount of money as liquidated damages under the law. (emphasis added).
Substantial evidence supports the jury’s findings. For example, Mr. Crommie testified that a PUC director told him “Maurice, you know we want fresh young blood in this group.” After he informed her that he had
There was ample similar testimony from plaintiffs, coworkers and other raters. There was testimony that the subjective oral examinations consisted of questions that could only be answered correctly by those who held certain positions given to younger people. There was additional testimony that performance evaluations of older workers had been changed to influence promotion ratings. Further, the jury was entitled to draw reasonable inferences from Exh. 126, a letter from the PUC President/Executive Director Weisser to Mr. Mangold responding to a complaint of age discrimination.
B. The verdict form.
As noted earlier, the first question on the verdict form combined the two theories: “Using the disparate treatment or disparate impact theory of age discrimination, did the [PUC] violate the ADEA federal law and/or the FEHA state law by discriminating against the plaintiffs on the basis of age?” The PUC argues that the trial court erred by combining the theories.
“[T]he trial court’s complete discretion as to whether a special or general verdict is to be returned extends to determining the form of the verdict and interrogatories, provided that the questions asked are adequate to obtain a jury determination of all factual issues essential to judgement.” In re Hawaii Federal Asbestos Cases,
The PUC argues that the error was prejudicial because the Plaintiffs used disparate impact as an evidentiary vehicle to introduce statistical evidence. However, “[statistics also may be used to establish a prima facie case of discrimination under the disparate treatment theory.” Palmer v. United States,
C. The statistical evidence.
The PUC also contends that Dr. Ble-cha’s statistical evidence was unreliable and insufficient to create a prima facie disparate impact case as required by Watson v. Fort Worth Bank & Trust,
However, merely because the statistics did not isolate a 40-and-above category does not render the statistics irrelevant. Part of a prima facie case is to discriminate in favor of “a substantially younger employee with equal or inferior qualifications.” Wallis,
The PUC also argues that the court erred in admitting “stray remarks.” Specifically, it points to remarks by Ms. Barkovich (“Maurice, you know we want fresh young blood in this group”), Mr. Weisser (“We’re going into a bright new future in which we have an excellent staff of young professional people” and “older employees, unfortunately, don’t take advantage of all the opportunities that are offered to them”), and “Division
The PUC cites Merrick v. Farmers Ins. Group,
All three cases are distinguishable. In both Merrick (referring to a younger selectee as “a bright, intelligent, knowledgeable young man”) and Rose (referring to senior employees as “part of an old-boy network”) the remarks alone were insufficient to withstand summary judgment. Here, on the other hand, there is other evidence in addition to the remarks. Pepsico is similarly distinguishable because the remarks there (“Pepsi didn’t necessarily like gray hair” and “we don’t want a unpromotable fifty-year-olds around”) were not tied to the employment decisions. Here, the remarks were by division directors, or by the President of the PUC. The statements were made during the scope of employment by senior decision-makers regarding assignments, promotions, or policies. Even if the remarks alone might have been insufficient to withstand summary judgment, however, the remarks were certainly relevant and, along with other substantial evidence, created a strong inference of intentional discrimination. See Price Waterhouse v. Hopkins,
D. Jurisdictional Requirements of the California Tort Claims Act.
The PUC next argues that the Plaintiffs’ state tort claim for violation of public policy
The California Tort Claims Act requires, as a condition precedent to suit against a public entity, the timely presentation of a written claim and the rejection of the claim in whole or in part. Snipes v. City of Bakersfield,
This issue is moot. The jury awarded damages as follows:
ADEA Federal Law Damages:
Mr. Crommie
Loss of earnings and Benefits: $63,460
Liquidated Damages: $63,460
Mr. Mangold
Loss of earnings and Benefits: $65,462
Liquidated Damages: $65,462
FEHA State Law Damages:
Mr. Crommie
Loss of earnings and Benefits: $63,460
Emotional Distress: $25,000
Mr. Mangold
Loss of earnings and Benefits: $68,590
Emotional Distress: $30,000
California Law, Wrongful Employment Action in Violation of Public Policy:
Mr. Crommie
Loss of earnings and Benefits: $63,460
Emotional Distress: $25,000
Mr. Mangold
Loss of earnings and Benefits: $68,590
Emotional Distress:
However, since the Plaintiffs could not obtain double recovery, the court entered judgment in favor of Mr. Crommie for $88,460 ($63,460 loss of earnings plus $25,000 emotional dis
E. Contingent Fee Multiplier Under State Law.
The next issue concerns whether state or federal law controls the method of calculating an attorneys’ fee awarded under state law. The issue arises because in City of Burlington v. Dague,
The PUC asserts that, although the right to a fee is a matter of state substantive law, the method of calculating that fee is procedural. Under an Erie analysis, the PUC contends that the court erred by applying the multiplier.
“We review de novo the legal question whether state or federal law applies in a diversity action. In construing a state law, we follow the decisions of the state’s highest court.” Harvey’s Wagon Wheel, Inc. v. Van Blitter,
The PUC’s argument fails. Existing Ninth Circuit precedent has applied state law in determining not only the right to fees, but also in the method of calculating the fees. See, e.g., Kern Oil and Refining Co. v. Tenneco Oil Co.,
Further, we follow other circuits that apply state law in calculating the fee. E.g., Northern Heel Corp. v. Compo Industries,
The PUC maintains that no case of this circuit has analyzed and considered the Erie issue regarding calculating the fee. The PUC also argues that in Dague the Supreme Court established a “rule of federal practice” regarding fee-shifting jurisprudence. As a federal rule, the PUC asserts that the practice falls within the holding of Hanna v. Plumer,
Applying Hanna, the availability of a multiplier for fees in state court, but not in federal court, would likely lead to forum-shopping. As this ease illustrates, if a multiplier is procedural, a significant difference in fees would be available in state court but not in federal court — an “inequitable administration of the law.” The method of calculating a fee is an inherent part of the substantive right to the fee itself, and a state right to an attorneys’ fee reflects a substantial policy of the state. Cf. Chambers v. NASCO,
The PUC also argues that we should predict California law and find that, in light of Dague, the California Supreme Court will no longer allow contingent-fee enhancements. The California Supreme Court approved of such enhancements in Serrano v. Priest,
Generally, California courts follow federal precedent in interpreting FEHA. Nesbit v. Pepsico,
F. Multiplier for Fees cm Fees.
Next, the PUC argues that the trial court erred in assessing a multiplier to its award of fees for pursuing fees. It cites King v. Palmer,
G. Post-Judgment Interest Rate.
Finally, the PUC points out (and the Plaintiffs concede) that the trial court erred when it awarded post-judgment interest at a 10% rate, payable from the date the verdict (rather than the judgment) was entered. “Post-judgment interest is determined by federal law.” Northrop Corp. v. Triad Intern. Marketing S.A.,
interest shall be calculated from the date of the entry of the judgment, at a rate equal to the coupon issue yield equivalent (as determined by the Secretary of the Treasury) of the average accepted auction price for the last auction of fifty-two week United States Treasury bills settled immediately prior to the date of the judgment.
Thus, we rémand for a determination of the correct interest rate payable from date of entry of final judgment, and entry of a corrected judgment.
We remand on the post-judgment interest issue, but affirm in all other respects.
Notes
. The PUC does not challenge the finding of retaliation in violation of 29 U.S.C. § 623(d).
. See also Martincic v. Urban Redev. Auth.,
. Thus, we need not address other issues raised by the PUC regarding the retroactive effect of the 1991 Civil Rights Act on Wards Cove Packing Co. v. Atonto,
. The letter reads in part:
... all of us should emulate the enthusiasm, tenacity and creativity with which many of our newer employees attack and solve problems. I find it admirable that people newly arrived to an assignment often are willing and able to look at problems from more than one perspective — not simply the one that has worked before .... I believe, as do many others, that employees new to a job tend to be less inhibited by traditional methodologies than those who have been on the same assignment for a long time.
.... We cannot afford to overlook any talent among the staff regardless of age. We know that it is our experienced employees— people who have been here for a while and know what it takes to get things done — that are the ... backbone of this organization. We also believe that fresh vistas can invigorate people who have become jaded after years of doing the same thing.
. See 9A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure: Civil 2d § 2508, at 189 (1995) ("Care should be taken to avoid questions that combine two issues disjunctively because a 'yes’ or ‘no’ answer may be construed as referring to either issue.”).
. See, e.g., Rojo v. Kliger,
. The court later awarded additional fees for defending a motion for reconsideration, and also multiplied those fees by 2.0, for a supplemental award of $86,940.