321 F.3d 403 | 3rd Cir. | 2003
NYGAARD, Circuit Judge:(cid:13) In this appeal, Appellant and Cross-Appellee Tai Van Le(cid:13) alleges that the District Court erred on two points by(cid:13) denying his Motion for Reconsideration: (1) denying the(cid:13) Motion to Amend Judgment to Increase Back Pay and(cid:13) Include Front Pay, and (2) upholding the validity of the Rule(cid:13) 68 Offer of Judgement. On cross-appeal, Appellees and(cid:13) Cross-Appellants, The Trustees of the University of(cid:13) Pennsylvania, allege that the District Court erred by(cid:13) denying in part its Petition for Attorneys’ Fees and Costs(cid:13) and denying its Motion for Judgment Notwithstanding the(cid:13) Verdict on Punitive Damages. For the reasons discussed(cid:13) below, we will affirm the decision of the District Court.(cid:13) I. Jurisdiction and Standard of Review(cid:13) We have jurisdiction over a final order of the District(cid:13) Court pursuant to 28 U.S.C. S 1291. The decision to deny(cid:13) a Motion for Reconsideration is within the discretion of the(cid:13) District Court, but "if the court’s denial was based upon the(cid:13) interpretation and application of a legal precept, review is(cid:13) plenary." Koshatka v. Philadelphia Newspapers, Inc., 762(cid:13) F.2d 329, 333 (3d Cir. 1985). On cross-appeal, we also(cid:13) have plenary review over the decision to deny the Motion for(cid:13) Judgment as a Matter of Law. Ambrose v. Township of(cid:13) Robinson, 303 F.3d 488, 492 (3d Cir. 2002). However,(cid:13) because the jury determined the issue on both of these(cid:13) motions, "our scope of review is limited to examining(cid:13) whether there is sufficient evidence to support the verdict,(cid:13) 3(cid:13) drawing all reasonable inferences in favor of the verdict(cid:13) winner." Kelly v. Matlock, Inc., 903 F.2d 978, 981 (3d Cir.(cid:13) 1990). We have plenary review over both legal questions(cid:13) regarding the interpretation of Rule 68 and the(cid:13) construction of the offer of judgment. Public Interest(cid:13) Research Group v. Windall, 51 F.3d 1179, 1184 (3d Cir.(cid:13) 1994).(cid:13) II. Discussion(cid:13) The University of Pennsylvania hired Tai Van Le, a(cid:13) Vietnamese-born U.S. citizen, as an Electronics Technician(cid:13) in 1986. Le worked primarily on projects generated by the(cid:13) research group led by Dr. Stanley Opella and related to the(cid:13) design of sophisticated electronic devices for nuclear(cid:13) magnetic resonance spectroscopy. This working(cid:13) arrangement continued harmoniously until late 1997, when(cid:13) Dr. Opella began expressing concern with the accuracy of(cid:13) Le’s designs and Le began to feel that certain statements(cid:13) made in the laboratory were directed towards his national(cid:13) origin in a discriminatory manner. After reporting these(cid:13) comments to the University, Le was assigned a new(cid:13) supervisor and the University conducted an internal(cid:13) investigation that did not discover discrimination.(cid:13) The situation did not improve from the perspective of(cid:13) either party and from September to early December 1998,(cid:13) Le took an extended sick leave. Upon his return, the(cid:13) University placed Le on probation for poor performance(cid:13) prior to his leave. Le was given several specific tasks to(cid:13) complete during the one month probationary period. He did(cid:13) not complete the assigned tasks and was terminated for(cid:13) poor performance in January 1999.(cid:13) In April 1999, Le filed a pro se complaint alleging(cid:13) national origin discrimination against his employer, the(cid:13) University of Pennsylvania, and his supervisor, Dr. Stanley(cid:13) Opella. Le filed a second complaint in January 2000(cid:13) against the same parties, this time alleging retaliation. On(cid:13) February 29, 2000, the defendants made an offer of(cid:13) judgment for $50,000 pursuant to FED. R. CIV. P. 68.1 This(cid:13) _________________________________________________________________(cid:13) 1. Federal Rule of Civil Procedure 68 provides, in part:(cid:13) 4(cid:13) offer was made jointly by the defendants on both of the(cid:13) then pending cases. Le rejected the offer and, after(cid:13) consolidation, the cases went to trial.(cid:13) At the close of Le’s evidence, the claims against Dr.(cid:13) Opella were dismissed pursuant to FED. R. CIV. P. 50. The(cid:13) remaining defendant, the University of Pennsylvania,(cid:13) presented its case and after deliberations, the jury returned(cid:13) a mixed verdict. The jury found for the University on Le’s(cid:13) discrimination claim, but awarded Le $25,000 in(cid:13) compensatory damages and $10,000 in punitive damages(cid:13) as to the retaliation claim. In post-trial motions, the District(cid:13) Court denied Le’s post-offer attorneys’ fees under Rule 68(cid:13) and granted the University’s motion to shift its post-offer(cid:13) costs. However, the District Court denied the University’s(cid:13) request for post-offer attorneys’ fees, finding that such fees(cid:13) could only be awarded under Title VII when the plaintiff(cid:13) brought a frivolous claim. The District Court also denied(cid:13) motions from both parties attacking the sufficiency of the(cid:13) evidence for the jury’s verdict.(cid:13) A. Le’s Appeal(cid:13) Le alleges that the District Court erred by denying his(cid:13) Motion for Reconsideration. Specifically, Le argues that the(cid:13) University did not demonstrate that he failed to mitigate his(cid:13) damages and thus the jury award was incorrect. Le also(cid:13) claims that the Offer of Judgment made by the University(cid:13) is invalid. Both arguments fail.(cid:13) 1. Mitigation of Damages by Le(cid:13) Damages in a Title VII case may be reduced by the jury,(cid:13) provided that the defendant-employer makes certain (cid:13) showings.2 In Booker v. Taylor Milk Co., 64 F.3d 860, 864(cid:13) _________________________________________________________________(cid:13) At any time more than 10 days before the trial begins, a party(cid:13) defending against a claim may serve upon the adverse party an offer(cid:13) to allow judgment to be taken against the defending party for the(cid:13) money or property or to the effect specified in the offer, with costs(cid:13) then accrued. . . . If the judgment finally obtained by the offeree is(cid:13) not more favorable than the offer, the offeree must pay the costs(cid:13) incurred after the making of the offer.(cid:13) 2. Title VII has been interpreted to require mitigation by the employee(cid:13) and allows reduction of damages otherwise. 42 U.S.C.S 2000e-5(g)(1)(cid:13) 5(cid:13) (3d Cir. 1995), we explained that "[t]o meet its burden, an(cid:13) employer must demonstrate that 1) substantially equivalent(cid:13) work was available, and 2) the Title VII claimant did not(cid:13) exercise reasonable diligence to obtain the employment."(cid:13) From the evidence presented at trial, it is clear that this(cid:13) burden was met.(cid:13) The University introduced testimony that University(cid:13) employees who are laid off regularly obtain comparable jobs(cid:13) at the University. This was exemplified by the testimony of(cid:13) Dr. Kathy Vallentine, Le’s co-worker in the same laboratory.(cid:13) Dr. Vallentine testified that with a diligent search she was(cid:13) able to find comparable employment within the University(cid:13) after the laboratory closed. Additionally, Dr. Hai Lung Dai,(cid:13) the Chair of the Chemistry Department, testified that the(cid:13) University offered Le an opportunity to have a paid leave of(cid:13) absence. During this leave, Le would receive support from(cid:13) the University’s Human Resources Division and a job(cid:13) consultant to aid him in his job search for a position within(cid:13) the University for three months and outside the University(cid:13) for six months. Le declined this offer.(cid:13) As to Le’s duty to seek other employment, he testified(cid:13) that he attended a job fair at some point and posted his(cid:13) resume online, but could only produce two rejection letters(cid:13) from a time period some fifteen months after his dismissal(cid:13) as proof that he sought other employment. Le did not(cid:13) attempt to find other work for a significant period of time(cid:13) following his dismissal, and only half-heartedly began after(cid:13) the amended lawsuit was filed in 2000. The jury could(cid:13) infer, from the ability to transfer positions within the(cid:13) University, the job fairs related to engineering, the two(cid:13) possible jobs from which Le was rejected, coupled with Le’s(cid:13) refusal to seek job-hunting assistance and general(cid:13) insouciance about his job search, that other jobs existed(cid:13) but that Le did not exercise reasonable diligence.(cid:13) 2. The Rule 68 Offer of Judgment(cid:13) Le argues that the Offer of Judgment made by the(cid:13) University should be declared invalid because it was not(cid:13) _________________________________________________________________(cid:13) ("Interim earnings or amounts earnable with reasonable diligence by the(cid:13) person or persons discriminated against shall operate to reduce the back(cid:13) pay otherwise allowable.").(cid:13) 6(cid:13) originally apportioned between Dr. Opella and the(cid:13) University, nor between the discrimination and retaliation(cid:13) claims. Le also argues that the offer contains ambiguous(cid:13) language and thus cannot be compared to the final(cid:13) judgment.(cid:13) Le points to several cases outside our circuit where the(cid:13) failure to apportion the offer was deemed fatal. In Gavoni v.(cid:13) Dobbs House, Inc., 164 F.3d 1071 (7th Cir. 1999), the(cid:13) Seventh Circuit affirmed the denial of the defendant’s(cid:13) motion for costs under Rule 68. The defendant had made(cid:13) an unapportioned offer of $10,000 to three plaintiffs and(cid:13) the jury ultimately awarded the plaintiffs a total of $6,500.(cid:13) Although the total amount of the offer was greater than the(cid:13) total sum received by the three plaintiffs, the court was(cid:13) concerned that the plaintiffs lacked "a clear baseline from(cid:13) which [they] may evaluate the merits of their case relative(cid:13) to the value of the offer." Id. at 1076. The court noted that(cid:13) there was no easily comparable sum involved from the face(cid:13) of the offer and pointed to the variety of arguments made(cid:13) by both sides, ranging from comparing the total offer with(cid:13) the total award, splitting the offer in thirds and then(cid:13) comparing, or comparing the individual awards with the(cid:13) total offer. According to the court "[t]hese varied(cid:13) constructions of the single offer only underscore its fatal(cid:13) problem: imprecision. The plaintiffs simply could not have(cid:13) evaluated the individualized values of the offer." Id.(cid:13) Le also cites to the Fifth Circuit’s decision in Johnston v.(cid:13) Penrod Drilling Co., 803 F.2d 867 (5th Cir. 1986). In(cid:13) Johnston, the court reversed the lower court’s decision to(cid:13) grant costs pursuant to Rule 68. Id. at 869. The court(cid:13) acknowledged the unique factual position of the case, in(cid:13) that a single plaintiff had received an unapportioned offer(cid:13) from two defendants, rejected the offer, but then later(cid:13) settled with one of the defendants. At the close of trial, the(cid:13) jury decided against the remaining defendant, but awarded(cid:13) the plaintiff an amount less than the original Rule 68 offer.(cid:13) The court found that the proper comparison was to look at(cid:13) the individual settlement amount plus the jury award as(cid:13) compared to the Rule 68 offer. Id. at 870. As this amount(cid:13) was greater than the offer, the court reversed.(cid:13) 7(cid:13) The cases Le cites are inapplicable because they differ(cid:13) significantly from the factual position of this case. Here, the(cid:13) University and Dr. Opella did not make an offer to multiple(cid:13) plaintiffs, nor were there other amounts besides the jury(cid:13) verdict to compare. Le knew from the outset what amount(cid:13) would be compared with his future judgment. In(cid:13) considering and distinguishing the cases cited by Le, the(cid:13) District Court also noted the unique relationship between(cid:13) Dr. Opella and the University. The University’s indemnity(cid:13) contract provides that they had accepted any financial(cid:13) responsibility resulting from any actions by Dr. Opella and(cid:13) thus "the University’s pocketbook and Dr. Opella’s(cid:13) pocketbook were one and the same." Le v. University of(cid:13) Pennsylvania, 2001 WL 849707, at * 5 (E.D. Pa. July 13,(cid:13) 2001). The District Court found that dismissing Le’s claims(cid:13) against Dr. Opella was not fatal to the offer of judgment(cid:13) because Le could expect that all costs would be borne by(cid:13) the University. Id.(cid:13) Given the single identity of the defendants, failure to(cid:13) apportion between the University and Dr. Opella was not(cid:13) fatal to the offer. A decision to the contrary could promote(cid:13) the addition of improper defendants so that their eventual(cid:13) dismissal would negate any legitimate Rule 68 offer made(cid:13) by the proper defendants.3 Likewise, the need to apportion(cid:13) between the retaliation and discrimination claims is(cid:13) unnecessary where, as here, only one plaintiff receives an(cid:13) offer pertaining to both claims. The jury returned a verdict(cid:13) for Le on the retaliation claim, but not on the(cid:13) discrimination claim. The offer applied to both claims in(cid:13) toto and the total judgment of $35,000 awarded can easily(cid:13) be compared to the Rule 68 Offer of $50,000 plus costs.(cid:13) _________________________________________________________________(cid:13) 3. We note that the District Court found that Dr. Opella was Le’s(cid:13) supervisor and not his employer. Under this relationship, liability cannot(cid:13) exist pursuant to Title VII. Sheridan v. EI DuPont de Nemours & Co., 100(cid:13) F.3d 1061, 1078 (3d Cir. 1996) (en banc). In Sheridan, we sat en banc(cid:13) to "clarify the quantum and nature of evidence that will permit a jury to(cid:13) find that an employer engaged in impermissible employment(cid:13) discrimination." Id. at 1063. As part of the appeal, we affirmed the(cid:13) dismissal of Sheridan’s supervisor at DuPont because"Congress did not(cid:13) intend to hold individual employees liable under Title VII." Id. at 1078.(cid:13) 8(cid:13) Le’s second argument for invalidating the offer of(cid:13) judgment is that the language of the offer was ambiguous(cid:13) as to whether or not costs were included--such that the(cid:13) offer was for either $50,000 including costs or $50,000 plus(cid:13) costs. The plain language of the offer dictates the result.(cid:13) The offer provides "for the total amount of $50,000.00, plus(cid:13) costs then accrued." App. at p. 84a. In Marek v. Chesny,(cid:13) 473 U.S. 1 (1985), the Supreme Court held that an offer in(cid:13) a Title VII matter includes attorneys’ fees in the definition(cid:13) of costs. The Court further found that "[a]s long as the offer(cid:13) does not implicitly or explicitly provide that the judgment(cid:13) not include costs" an offer is valid and presumes the(cid:13) defendant will pay costs. Id. at 6. Le counters by quoting(cid:13) later language in the offer that "the offer [of $50,000 plus(cid:13) costs] shall represent and fix the total liability of the(cid:13) [defendants] for any and all of plaintiff ’s loss, claims,(cid:13) damages, costs, attorneys’ fees, or any other amounts or(cid:13) expenses recoverable, or potentially recoverable, in this(cid:13) action." App. at p. 85a. Le claims that this language(cid:13) deviates from the clear language of "plus costs accrued"(cid:13) and creates an assumption that something else is meant.(cid:13) This argument has no merit. The plain language of the offer(cid:13) states that it is "plus costs" and in another portion of the(cid:13) offer, the University specifically cites to the Marek decision(cid:13) to state that such costs would include attorneys’ fees. The(cid:13) District Court properly compared the final judgment of(cid:13) $35,000 plus costs to the offer of $50,000 plus costs in(cid:13) determining that the offer exceeded the judgment.(cid:13) B. The University’s Cross-Appeal(cid:13) On cross-appeal, the University argues that the District(cid:13) Court erred by denying its Motion for Judgment as Matter(cid:13) of Law on the issue of punitive damages, and by denying its(cid:13) request for post-offer attorneys’ fees under FED . R. CIV. P.(cid:13) 68.(cid:13) 1. Motion for Judgment as a Matter of Law(cid:13) Initially, the University argues that they are entitled to(cid:13) judgment as a matter of law on punitive damages because(cid:13) the record is devoid of evidence that the University acted(cid:13) maliciously or with reckless indifference towards Le’s(cid:13) federally protected rights.4 The record indicates that there(cid:13) _________________________________________________________________(cid:13) 4. As provided in 42 U.S.C. S 1981a(b)(1),"[a] complaining party may(cid:13) recover punitive damages . . . if the complaining party demonstrates that(cid:13) 9(cid:13) was sufficient evidence to support the jury’s verdict on(cid:13) punitive damages. For example, Dr. George Palladino, the(cid:13) Vice Chair of the Chemistry department, reassigned Dr.(cid:13) Ronald McNamara as Le’s new supervisor following Le’s(cid:13) complaints regarding discrimination and Dr. Opella. When(cid:13) questioned as to why Dr. McNamara was assigned, Dr.(cid:13) Palladino testified that he based this decision on his(cid:13) interactions with Dr. McNamara on the basketball court.(cid:13) Specifically, he testified that:(cid:13) We had departmental basketball, started playing that(cid:13) when I was, first came to Penn and McNamara was a(cid:13) regular and we had African-Americans. We had Asian-(cid:13) Americans that were out there every day and I’ve been(cid:13) around people a lot in my life and you can tell if(cid:13) somebody is a racist I think. You’d see it pretty easily(cid:13) on a basketball court. And Ron is a real, he’s an(cid:13) excellent athlete and he played very well and he, it(cid:13) didn’t make any difference what your color or creed(cid:13) was, it never--I mean, you make a judgment I think in(cid:13) those situations.(cid:13) Since the team was made up of a racially diverse group, Dr.(cid:13) Palladino concluded that Dr. McNamara would not have(cid:13) any problems supervising Le. The decisionmaking process(cid:13) used by Dr. Palladino could easily have been viewed by the(cid:13) jury as demonstrating ‘reckless indifference’ towards Le’s(cid:13) federally protected rights. Also, there was additional(cid:13) evidence that Le presented a lengthy rebuttal in response to(cid:13) a bad performance review, which was then cursorily(cid:13) handled by the University’s administration. Further, the(cid:13) District Court noted that upon receiving Le’s complaint,(cid:13) and before concluding its investigation, the administration(cid:13) failed to counsel and advise Le’s supervisors and colleagues(cid:13) about the evils of discrimination. In all, sufficient evidence(cid:13) exists to support the jury’s verdict.(cid:13) 2. The Rule 68 Offer of Judgment(cid:13) The final issue on the University’s cross-appeal is(cid:13) whether the District Court erred by holding that the(cid:13) _________________________________________________________________(cid:13) the respondent engaged in a discriminatory practice or discriminatory(cid:13) practices with malice or with reckless indifference to the federally(cid:13) protected rights of an aggrieved individual."(cid:13) 10(cid:13) definition of costs, as it pertains to defendants under Rule(cid:13) 68, does not include attorneys’ fees.(cid:13) The seminal case in this area is Marek v. Chesny , 473(cid:13) U.S. 1 (1985). Although it does not squarely answer the(cid:13) question before us, it does guide our analysis. In Marek, the(cid:13) Supreme Court addressed "whether attorneys’ fees incurred(cid:13) by a plaintiff subsequent to an offer of settlement under(cid:13) Federal Rule of Civil Procedure 68 must be paid by the(cid:13) defendant under 42 U.S.C. S 1988, when the plaintiff(cid:13) recovers a judgment less than the offer." Id . at 3. Generally,(cid:13) prevailing plaintiffs in a civil rights suit are entitled to(cid:13) recover their attorneys’ fees, but Rule 68 operates to block(cid:13) such a shift if the judgment returned is less than the offer.(cid:13) In discussing the policies of both S 1988 and Rule 68, the(cid:13) Court found that the two were not in conflict and that "the(cid:13) most reasonable inference is that the term ‘costs’ in Rule(cid:13) 68 was intended to refer to all costs properly awardable(cid:13) under the relevant substantive statute or other authority.(cid:13) In other words, all costs properly awardable in an action(cid:13) are to be considered within the scope of Rule 68‘costs.’ " Id.(cid:13) at 9. The Court went on to hold that "absent congressional(cid:13) expression to the contrary, where the underlying statute(cid:13) defines ‘costs’ to include attorneys’ fees, we are satisfied(cid:13) such fees are to be included as costs for purposes of Rule(cid:13) 68." Id. The Court found that this interpretation of Rule 68(cid:13) did not undercut the goals of civil rights plaintiffs, and that(cid:13) the plaintiff in Marek was not entitled to attorneys’ fees due(cid:13) to the operation of Rule 68.(cid:13) According to Marek, we must look to the underlying(cid:13) statute and its interpretations to determine what(cid:13) constitutes a ‘properly awardable’ cost to a defendant in a(cid:13) Title VII action. The University urges that becauseS 1988(cid:13) grants a prevailing party reasonable attorneys’ fees, and(cid:13) they prevailed on the discrimination claim and the issue of(cid:13) post-offer costs, they should receive their post-offer(cid:13) attorneys’ fees. This argument fails to account for how we(cid:13) have defined ‘costs’ under S 1988. In EEOC v. L.B. Foster(cid:13) Co., 123 F.3d 746 (3d Cir. 1997), we addressed the issue of(cid:13) when a Title VII defendant may be properly awarded its(cid:13) attorneys’ fees as the prevailing party. Tracking the(cid:13) Supreme Court’s holding in Christiansburg Garment Co. v.(cid:13) 11(cid:13) EEOC, 434 U.S. 412 (1978), we concluded that the(cid:13) standard for awarding attorneys’ fees to a prevailing(cid:13) defendant was not the same as the standard for a(cid:13) prevailing plaintiff. L.B. Foster Co., 123 F.3d at 750. We(cid:13) held that "a district court may in its discretion award(cid:13) attorney’s fees to a prevailing defendant in a Title VII case(cid:13) upon a finding that the plaintiff ’s action was frivolous,(cid:13) unreasonable, or without foundation, even though not(cid:13) brought in subjective bad faith." Id. at 751 (quoting(cid:13) Christiansburg, 434 U.S. at 421).(cid:13) In the context of Rule 68, however, this creates a tension(cid:13) because Rule 68 does not apply if the defendant wins the(cid:13) underlying lawsuit. Delta Air Lines, Inc. v. August, 450 U.S.(cid:13) 346, 352 (1981). Thus, for the cost-shifting provision of(cid:13) Rule 68 to apply, the plaintiff must obtain some judgment(cid:13) against the defendant. Such a recovery by the plaintiff(cid:13) would negate any argument that the plaintiff ’s suit was(cid:13) frivolous. Therefore, we hold that a defendant in a Title VII(cid:13) civil rights suit can never recover its attorneys’ fees under(cid:13) Rule 68, because the triggering event of that rule alters the(cid:13) potential costs that are ‘properly awardable’ to a defendant(cid:13) under S 1988.5 Here, Le was awarded $35,000 in damages(cid:13) and thus his suit cannot be described as frivolous. We(cid:13) conclude that the University’s attorneys’ fees are not(cid:13) properly awardable costs under Rule 68.(cid:13) _________________________________________________________________(cid:13) 5. Although this is an issue of first impression for our court, this(cid:13) conclusion comports with those of our sister courts of appeal who have(cid:13) previously addressed this issue. See, e.g., Crossman v. Marcoccio, 806(cid:13) F.2d 329, 334 (1st Cir. 1986) ("because courts may not properly award(cid:13) attorney’s fees to unsuccessful civil rights defendants under section(cid:13) 1988, we hold that Rule 68 can never require prevailing civil rights(cid:13) plaintiffs to pay defendants’ post-offer attorney’s fees."); O’Brien v. City of(cid:13) Greers Ferry, 873 F.2d 1115, 1120 (8th Cir. 1989) (accepting the holding(cid:13) of Crossman and finding that the City was not entitled to attorneys’ fees(cid:13) because the plaintiff had recovered against two municipal officers);(cid:13) EEOC. v. Bailey Ford, Inc., 26 F.3d 570, 571 (5th Cir. 1994) ("[E]ven if(cid:13) appellee were entitled to recover "costs" under Rule 68, its attorneys’ fees(cid:13) are not among the properly recoverable costs without a determination(cid:13) that the action was frivolous, unreasonable, or without foundation.").(cid:13) 12(cid:13) III. Conclusion(cid:13) For the forgoing reasons, the August 29, 2001 Order of(cid:13) the District Court will be affirmed.(cid:13) A True Copy:(cid:13) Teste:(cid:13) Clerk of the United States Court of Appeals(cid:13) for the Third Circuit(cid:13) 13
