Sаndra L. RICE, Plaintiff-Appellee, v. SUNRISE EXPRESS, Incorporated, Gainey Corporation And Sunrise U.S.A., Incorporated, Defendants-Appellants.
Nos. 97-3982, 98-2195
United States Court of Appeals, Seventh Circuit
Argued May 17, 1999. Decided April 7, 2000.
209 F.3d 1008
The role of motive is left unclear by the Supreme Court‘s decision. On the one hand the Court recited the standard formula that the equal protection clause forbids intentional differences in treatment for which there is no rational basis. On the other hand it said that the claim that the difference in treatment was “irrational and wholly arbitrary” (emphasis added) was sufficient and that the Court was not reaching our “alternative theory of ‘subjective ill will.‘” 120 S.Ct. at 1075. If a merely unexplained difference in police treatment of similar complaints made by different people established a prima facie case of denial of equal protection of the laws, the federal courts would be drawn deep into the local enforcement of petty state and local laws. Repeating what we said in our opinion in Olech, and Justice Breyer in his concurring opinion in the Supreme Court, 120 S.Ct. at 1075, we gloss “no rational basis” in the unusual setting of “class of one” equal protection cases to mean that to make out a prima facie case the plaintiff must present еvidence that the defendant deliberately sought to deprive him of the equal protection of the laws for reasons of a personal nature unrelated to the duties of the defendant‘s position. We described the class of equal protection cases illustrated by Olech as “vindictive action” cases and said that they require “proof that the cause of the differential treatment of which the plaintiff complains was a totally illegitimate animus toward the plaintiff by the defendant.” 160 F.3d at 388. No evidence of such an animus was presented in this case.
Amplifying our earlier point about other remedies, we note that if the neighbors have committed torts against Hilton, he has civil remedies under state law. He has no remedy under the U.S. Constitution.
AFFIRMED.
Patrick L. Proctor, Kathryn A. Brogan (argued), Warsco Brogan, Fort Wayne, IN, for Plaintiff-Appellee in Nos. 97-3982 and 98-2195.
Joseph J. Vogan (argued), Varnum, Riddering, Schmidt & Howlett, Grand Rapids, MI for Defendants-Appellants in No. 97-3982.
Mary C. Bonnema, Varnum, Riddering, Schmidt & Howlett, Grand Rapids, MI, for Defendants-Appellants in No. 98-2195.
Before EASTERBROOK, RIPPLE and EVANS, Circuit Judges.
RIPPLE, Circuit Judge.
I
BACKGROUND
A. Facts
In 1994, Sunrise Express, a trucking company, hired Sandra Rice as a payroll billing clerk. When Sunrise Express hired Ms. Rice, it already employed two other payroll billing clerks. Both of these other employees left the company by early 1995. Thereafter, Sunrise Express hired Christy Huntington to replace the departing employees.
In 1995, the owners of Sunrise Express sold the company to Gainey Corporation (“Gainey“), and later, in 1997, Sunrise Express was merged into Sunrise U.S.A., Inc. (“Sunrise USA“). Due to the sale of Sunrise Express, the company reorganized its office, computerized its payables and receivables, and upgraded its computer system. Sunrise Express asserts that this upgrade, completed by November 1995, drastically increased the speed of data entry, the main responsibility of payroll billing clerks. Consequently, the workload of these individuals also was reduced drastically. The company further claims that it restructured the duties of several employees so that the manager of the payroll billing clerks assumed some of their tangential duties. Meanwhile, the company began to experience а decrease in its freight business. Sunrise Express argues that all of these factors led to its decision to terminate one of its payroll billing clerks.
Sandra Rice brought an action against Sunrise Express, Inc. (“Sunrise Express“) for violating the Family and Medical Leave Act (“FMLA” or “the Act“) after Sunrise Express terminated her upon her return from a medical leave. Sunrise Express argued that Ms. Rice would have been terminated even if she had not taken leave, and, thus, the company had not violated the Act. The jury returned a verdict for Ms. Rice.
On appeal, Sunrise Express first asserts that the district court erroneously placed the burden of proof on Sunrise Express to prove that it had a legitimate business reason for her termination. Sunrise Ex-
In mid-January 1996, Ms. Rice injured a toe on her right foot and experienced both swelling and infection. Her physician admitted her to the hospital and placed her on antibiotics. She remained in the hospital for one week and then returned home for a second week. Her physician then authorized her to work half-days, which she did for one more week. At the end of the week, however, the physician informed her that her toe had to be amputated. Ms. Rice underwent surgery on February 14 and remained on leave from work for 4 more weeks before her doctor released her to return to work beginning on March 11.
On March 5, Ms. Rice informed Sunrise Express that she would be returning to work on March 11; however, on March 7 she was informed that she was being laid-off beginning March 11. According to Sunrise Express, her lay-off stemmed from the decrease in freight and the ability of other employees to complete the work without her. Sunrise Express claimed that Ms. Rice was chosen for the lay-off over Ms. Huntington because the latter had a better work ethic and because Ms. Rice wasted time taking smoke breaks, playing computer games, and talking on the telephone.
Ms. Rice claims, however, that Betty Keiser, the owner of Sunrise Express, told her that the reasоn for her lay-off was because she was “already off.” Tr.V at 60. The plaintiff also states that others in Sunrise Express management told her that the decision to terminate her was made months before her medical leave. Sunrise Express offered the personal circumstances of Ms. Rice as its reason for not terminating her before her FMLA leave. Sunrise Express states that it chose January 1 as the target date for Ms. Rice‘s lay-off because the company did not wish to dismiss an employee during the holiday season. Around the target date, Ms. Rice‘s family experienced the death of a member and also suffered other health and financial problems. Therefore, Sunrise Express claims, it decided to delay her lay-off a “short time” and within that “short time” she went on FMLA leave.
Ms. Rice sued Sunrise Express for violating
B. Procedural History
On September 17, 1997, the district court conducted a final pre-trial conference. At that meeting, the court raised the issue of whether Gainey was liable as a successor corporation or as a joint employee of Sunrise Express. Defense counsel told the court that, as a practical matter, the issue of Gainey‘s liability was not material to the outcome of the case or to the viability of any judgment that Ms. Rice might obtain. The parties explained that they had stipulated that Sunrise USA was the successor corporation of Sunrise Express following their merger and, therefore, would be liable for any judgment rendered against Sunrise Express. Satisfied that Sunrise USA had ample re-
Several weeks later, the district court raised the possibility of referring this case to a magistrate judge for trial because the district judge‘s own calendar was running somewhat behind. Counsel for the defense later filed a written consent on behalf of Sunrise Express, Inc.3 No consent was sought from Gainey, even though the same counsel represented both Sunrise USA and Gainey.
The magistrate judge proceeded to conduct a two-day trial on October 22 & 23, 1997. Counsel appeared at trial on behalf of Sunrise Express аnd Sunrise USA. Throughout the course of trial, no indication was given that Gainey was missing from the trial.
At the conclusion of the two-day trial, the jury rendered a verdict in favor of Ms. Rice. The magistrate judge then entered an order and judgment in her favor and against Sunrise USA. The judgment order specifically indicated that the judgment was against Sunrise USA alone because the parties had stipulated that Sunrise USA was the “proper named defendant in this case.” R.86 at 9.4 At no time did counsel for Sunrise USA object that the record lacked Gainey‘s consent to trial before the magistrate judge.
Sunrise USA appealed the judgment of the district court to this court. On December 16, 1997, we entered an order sua sponte requiring Sunrise USA, Sunrise Express, and Gainey to file a jurisdictional memorandum. In reply to that order, these corporаtions raised for the first time the argument that Gainey had not consented to trial by a magistrate judge and that such consent was necessary for jurisdiction.
On January 30, 1998, Ms. Rice filed, in the district court, a motion for correction of record and entry of an order nunc pro tunc. The district court granted Ms. Rice‘s motion and directed the clerk of the district court to enter a notation in the record to show that the court had, on September 17, 1997, accepted the stipulation of the parties that Gainey was to be severed from the case.5 In issuing the order, the district court pointedly noted
that it was taking the action in order to show what had been done previously, not to alter substantive rights:
As the transcript of the September 17, 1997 final pre-trial conference shows, this court determined that Sunrise USA was financially able to satisfy any judgment agаinst it, and then obtained both counsel‘s agreement that determination of Gainey‘s liability would not be an issue at trial. Therefore Gainey was severed from the trial. Under Rule 21 of the Federal Rules of Civil Procedure, severance creates two separate actions where previously there was but one. R.122 at 6.
II
DISCUSSION
A. Jurisdiction
The first issue that we must confront is the jurisdiction of this court and, by implication, the jurisdiction of the district court. Because federal courts are courts of limited jurisdiction, we must approach any question concerning the limits of our authority with great care and circumspection. At the same time, we must avoid hypertechnical characterizations of procedural matters that serve none of the policies that animate the jurisdictional statutes but instead produce judicial diseconomy and increase litigant expenses.6
The situation before us arises from the failure of the district court to account explicitly for the defendant Gainey. As the case originally came to this court, it appeared that Gainey had not consented to trial before a magistrate judge. Therefore, it appeared that the allegation with respect to it was still pending in the district court. If this situation were the case, there would be no final judgment in the action to provide this court with jurisdiction under
The district court attempted to clarify this ambiguity by the entry of a nunc pro tunc order that recites that, at the final pretrial conference, the district court, acting pursuant to Rule 21 of the Federal Rules of Civil Procedure,8 had severed Gainey and that the case proceeded only with respect to the other defendants.9
A district court may enter a nunc pro tunc order that clarifies a jurisdictional issue. In Local 1545, United Mine Workers of America v. Inland Steel Coal Co., 876 F.2d 1288 (7th Cir.1989), this court encountered a situation analogous to the one at hand. On May 10, the district court, when entering judgment against the
When a district court has taken all the steps necessary for an action that affects jurisdiction, but imprecisely memorializes that action, the district court may issue a nunc pro tunc order to explain more precisely what took place. Given the Supreme Court‘s express direction in Bankers Trust Co. v. Mallis, 435 U.S. 381, 386-87 (1978), a decision regarding jurisdiction cannot turn on a rigid paper trail; rather, we must evaluate what actually occurred and determine whether the failure to memorialize adequately what in fact occurred misled or prejudiced any party.
When a United States District Judge states what occurred in his or her courtroom on a particular occasion, that statement is certainly worthy of our acceptance, unless the record demonstrates that the judge misapprehended the situation. A district court‘s credibility certainly is not dependent on the existence of a contemporaneous writing. As Judge Flaum, writing for a panel that also included Judges Posner and Kanne, has noted:
United States v. Taylor, 841 F.2d 1300, 1308 (7th Cir.), cert. denied, 487 U.S. 1236 (1988).[a] written order is the best evidence of a judicial act. But in the absence of a statutory provision requiring the entry of a written order, the judicial dеtermination alone stands as the operative act of the court. Courts accomplish much of their business without formal memorialization.
The record demonstrates that the order entered by the district court is “nunc pro tunc” not only in form but in substance. The district court was well aware that it could not “rewrite history,” but could only clarify what had taken place in its earlier proceedings. The district court acknowledged that it was simply memorializing the past, not changing the status of the parties. Moreover, the course of the proceedings at the pre-trial conference demonstrates that the district court intended a severance and that the parties understood the action as a severance. First, the district court stated that the parties should “simply hold in abеyance any determination of successor liability by Gainey Corporation until such time as it may become material.” Both counsel agreed that this course of action was acceptable, and the court concluded that they could “get the issue out of the case for the time being, and perhaps not have to deal with it at all.” Tr.I at 6. The court presumably knew that, if the trial was bifurcated pursuant to
The parties also understood the court‘s action as a severance. The record demonstrates that the parties did understand that the suit was proceeding only against
The district court properly severed Gainey under
Because Gainey had been severed from the case, its consent to the magistrate judge‘s trying the remaining counts of the suit was not needed; the magistrate judge therefore was entitled to enter final judgment with respect to these counts. Accordingly, the district court had jurisdiction, and we have appellate jurisdiction.
B. Burden of Proof and Jury Instructions
The district court instructed the jury that the defendants had the burden to establish that Ms. Rice would not have been retained even if she had not been on FMLA leave.10 For the reasons that follow, we have concluded that this instruction is not an accurate reflection of the statutory mandate. In analyzing this issue, we must focus on the structure and the language of the statute. We begin with the structure.
In King v. Preferred Technical Group, 166 F.3d 887 (7th Cir. 1999), Judge Kanne explained, in some detail, the structure of the FMLA. He noted that the Act “establishes two categories of broad protections for employees.” 166 F.3d at 891. First, in
The Act provides eligible employees of a covered employer the right to take unpaid leave for a period of up to twelve
King, 166 F.3d at 891. When an employee alleges a deprivation of these substantive guarantees, the employee must demonstrate by a preponderance of the evidence only entitlement to the disputed leave. The issue of the employer‘s intent is immaterial. See King, 166 F.3d at 891.
In addition to these substantive prescriptive rights, the FMLA also “affords employees protection in the event they are discriminated against for exercising their rights under the Act.” Id. Thus, the Act proscribes action by the employer to discriminate or to retaliate against an employee for the exercise of rights created by the Act. See id.; see also
In contrast to what an employee must show to establish a deprivation of a substantive guarantee under the Act, when an employee raises the issue of whether the employer discriminated against an employee by taking adverse action against the employee for having exercised an FMLA right, the question of intent is relevant. The issue becomes whether the employer‘s actions were motivated by an impermissible retaliatory or discriminatory animus.
Ms. Rice claims that her employer, Sunrise Express, interfered with her rights under the FMLA. In order to make such a claim, however, she must, as an initial matter, demonstrate that she possessed a right under the Act. We therefore must turn to the prescriptive section that creates the right to reinstatement and focus on the wording of that section.
Except as provided in subsection (b) of this section, any eligible employee who takes leave under
section 2612 of this title for the intended purpose of the leave shall be entitled, on return from such leave— (A) to be restored by the employer to the position of employment held by the employee when the leave commenced; or (B) to be restored by the employer to an equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment.
Nothing in this section shall be construed to entitle any restored employee to— (A) the accrual of any seniority or employment benefits during any period of leave; or (B) any right, benefit, or position of employment other than any right, benefit, or position to which the employee would have been entitled had the employee not taken the leave.
In King, and again in Diaz v. Fort Wayne Foundry Corp., 131 F.3d 711 (7th Cir. 1997), this court stated succinctly the burden of the plaintiff in establishing a cause of action under the prescriptive sections of the Act, including
In its regulations implementing the Act, see
An employer must be able to show that an employee would not otherwise have been employed at the time reinstatement is requested in order to deny restoration to employment.... An employer would have the burden of proving that an employee would have been laid off during the FMLA leave period and, therefore, would not be entitled to restoration.
In this case, in which the evidence was fairly close, we cannot say that the district court‘s instruction misallocating the burden of proof did not make a differencе in the final outcome of the case. Accordingly, we must remand the case to the district court for a new trial.
Conclusion
For the foregoing reasons, the jury verdict is reversed, and the case is remanded
REVERSED and REMANDED.
TERENCE T. EVANS, Circuit Judge, dissenting.
I respectfully disagree with the majority‘s conclusion that Rice should have the burden of establishing that she would have been retained if she had not been on FMLA leave. While I am not saying this issue can only be sensibly resolved in one way, it seems to me that it‘s better resolved by requiring the employer to shoulder the burden.
When a statute is not clear, we owe deference to the interpretation by an agency charged with enforcing it if that interpretation is “based on a permissible construction of the statute.” Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843 (1984). Quite naturally, this principle applies to regulations of the Department of Labor. See Thorson v. Gemini Inc., 205 F.3d 370 (8th Cir. 2000) (explicitly giving Chevron deference to the Department of Labor in its interpretation of “serious health condition” under the FMLA); and Price v. City of Fort Wayne, 117 F.3d 1022 (7th Cir. 1997) (relying on FMLA regulations to interpret the phrase “serious health condition” with no explicit discussion of Chevron principles). Section 2614(a)(3)(B) gives employers an exemption but it is silent, and therefore unclear, as to who bears the burden of proof on the issue. Thus, the Department of Labor has promulgated regulations which state that an “employer would have the burden of proving that an employee would have been laid off during the FMLA leave period and, therefore, would not be entitled to restoration.”
This agency interpretation of
On a practical level, it makes sense to require the employer to bear the burden of proof on this issue. The employer is in control of the evidence. Of course, one might say that the same is true in discrimination cases, and there, to use the McDonnell Douglas model for summary judgment, the employer only has to produce еvidence that there was a legitimate reason for the employment action and the employee must show that the reason given is pretextual. McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). But there are problems with the approach. Even in discrimination cases, the McDonnell Douglas framework does not apply at trial. Postal Service v. Aikens, 460 U.S. 711 (1983). And we have said, in a way that can hardly be misunderstood, that we disapprove of a McDonnell Douglas burden-shifting approach in FMLA cases not involving discrimination. Diaz. Nevertheless, I think the majority here has allowed a McDonnell Douglas-style analysis to cast too dark a shadow over its view of this case.
What must be remembered is that this is a labor case, not a discrimination case. Congress has given the employee the sub-
Notes
Except as provided in subsection (b) of this section, any eligible employee who takes leave under
section 2612 of this title shall be entitled, on return from such leave— (A) to be restored by the employer to the position of employment held by the employee when the leave commenced....
THE COURT: Well, one thing we might do, then, why don‘t we have a stipulation to that effеct [Sunrise USA has ample resources to pay] and simply hold in abeyance any determination of a successor liability by Gainey Corporation until such time as it may become material.
MS. BROGAN: [Ms. Rice‘s attorney]: Post judgment.
MR. KEEN: So a stipulation that Sunrise U.S.A. would—
THE COURT: Is the successor to Sunrise Express Inc. and would be liable for any judgment entered against Sunrise Express, Inc. and as far as you know, until you see the verdict, has the resources to pay it.
MR. KEEN: Okay.
THE COURT: That way we can simply—
MS. BROGAN: That‘s acceptable to us.
THE COURT: —get the issue out of the case for the time being, and perhaps not have to deal with it at all. Tr.I at 5-6.
(1) Upon the consent of the parties, a full-time United States magistrate or a part-time United States magistrate who serves as a full-time judicial officer may conduct any or all proceedings in a jury or nonjury civil matter and order the entry of judgment in the case, when specially designated to exercise such jurisdiction by the district court or courts he serves.
Misjoinder of parties is not ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just. Any claim against a party may be severed and proceeded with separately.
(b) Separate Trials. The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any claim, cross-claim, counterclaim, or third-party claim, or of any separate issue or of any number of claims, cross-claims, counterclaims, third-party claims, or issues, always preserving inviolate the right of trial by jury as declared by the Seventh Amendment to the Constitution or as given by a statute of the United States.
The district court did not explicitly state “I sever Gainey under Rule 21;” however, this court does not require a formal order of sеverance if the evidence shows that the district court intended to sever the parties and the parties understood that severance had occurred. See Hebel v. Ebersole, 543 F.2d 14, 17 (7th Cir.1976); accord United States v. O‘Neil, 709 F.2d 361, 368 (5th Cir. 1983). As explained below, the district court did intend to sever Gainey from the actions and the parties were aware this had occurred.
(1) If any difference arises about whether the record truly discloses what occurred in the district court, the difference must be submitted to and settled by that court and the record conformed accordingly.
(2) If anything material to either party is omitted from or misstated in the record by error or accident, the omission оr misstatement may be corrected and a supplemental record may be certified and forwarded:
(A) on stipulation of the parties;
(B) by the district court before or after the record has been forwarded; or
(C) by the court of appeals.
(3) All other questions as to the form and content of the record must be presented to the court of appeals.
(a) Clerical Mistakes. Clerical mistakes in judgments, orders or other parts of the record and errors therein arising from oversight or omission may be corrected by the court at any time of its own initiative or on the motion of any party and after such notice, if any, as the court orders. During the pendеncy of an appeal, such mistakes may be so corrected before the appeal is docketed in the appellate court, and thereafter while the appeal is pending may be so corrected with leave of the appellate court.