A long-running disparate impact case challenging promotions of firefighters to the ranks of Lieutenant and Captain is remanded by the Sixth Circuit for a third trial to award back pay, and the panel reassigns the case to a new judge for good measure. The panel has valuable things to say about how to calculate monetary make-whole relief. It also affirms injunctive relief, and appointment of a monitor, to purge the city's violation.
Howe v. City of Akron, No. 14-3352 (6th Cir. Sept. 17, 2015): A case filed in 2006, including twenty-three plaintiffs, challenged the promotion process for the Akron Fire Department under federal and state law for race and age discrimination (Title VII, the ADEA and the Ohio Revised Code Chapter 4112). The process involved test scoring, "a written work sample exercise" and two oral assessments, including "a subordinate conference and incident command." The process allocated promotions heavily skewed to white and under-40 age candidates.
Following a 2008 jury trial that found disparate impact liability on age, and 2009 findings by the judge that the same process violated Title VII, There then ensued four-plus year battle over remedies. The court ordered a preliminary injunction to award promotions.
There were also two interlocutory appeals. On the first, the Sixth Circuit held that "the district court did not abuse its discretion in issuing the preliminary injunction requiring [Akron] to promote certain plaintiffs." Howe v. City of Akron, 723 F.3d 651 (6th Cir. 2013) (Howe I). There was a second appeal of a sanctions award against plaintiffs' counsel, but that was dismissed for lack of appellate jurisdiction (Howe II, 557 F. App'x 402 (6th Cir. 2014)).
A lengthy, second bench trial on back pay - interrupted by a fight over the plaintiffs' damages witness, whose testimony the court ordered excluded - ended in a total award of $616,217.75. The court also entered a permanent injunction and ordered a monitor for future rounds of promotions.
Both parties appealed different parts of the remedial relief, while Akron continued its challenge to liability. The Sixth Circuit here affirms liability and much of the relief, but orders retrial on the back-pay award.
1. The panel affirms liability, relying on law-of-the-case from Howe I. Akron challenged the application of that principle in this case, arguing that first panel clearly erred in holding that it waived one of its legal arguments. But the panel holds that Akron failed to demonstrate "extraordinary circumstances" to depart from the court's earlier ruling. The record had not changed, and There had been no intervening changes in the law that merited reconsideration.
The panel also holds that Akron's forfeited its legal challenges to the liability verdict, such as sufficiency of the evidence and challenges to the jury instructions, by not presenting them in Howe I: "Had Akron asserted that these errors undermined the liability judgment, then we could have taken those arguments into consideration in Howe I. Akron chose to challenge There aspects of the liability judgment instead."
2. The district court erred in calculating all Title VII back-pay awards from the date when the eligibility list expired in April 2007. The panel holds that the correct date of injury was instead when the promotions occurred in 2005. Moreover, the district court "should have calculated each plaintiff's back pay from the date no more than two years before he or she filed a charge of discrimination with the EEOC" (citing 42 U.S.C. § 2000e-5(g)(1)).
3. The district court also erred, the panel holds, in not awarding the plaintiffs step increases - awards that compensate for lost raises and promotional opportunities. Akron argued that "the record does not include any evidence necessary to compute step increases" because the district court knocked out the plaintiffs' damages witness (Carr) and exhibit based on an alleged failure to disclose his testimony under Federal Rule of Civil Procedure 26(a)(1)(A)(iii). The Sixth Circuit holds that the exclusion of this evidence as a sanction was an abuse of discretion. In particular, it holds clearly erroneous the judge's finding that the plaintiffs were primarily responsible for the non-disclosure and that it was a deliberate "bait-and-switch" to avoid discovery.
"The hurried nature of the second discovery period, rancor between the parties, and the last-minute decisions that substantially affected back-pay calculations contributed to the confusion. Although the plaintiffs are not blameless, we believe that the district court caused many of the problems that led to the late disclosure of the plaintiffs' final back-pay calculations."
4. Further, the Sixth Circuit holds that the plaintiff ought to have been awarded prejudgment interest, in particular that the plaintiffs never waived such relief: "plaintiffs have consistently pursued prejudgment interest in the district court, and the district court led the plaintiffs to believe it would consider their request for prejudgment interest at the conclusion of the retrial, but did not do so."
5. Akron, on its appeal of the damage award, argued that the district court ought to have applied the Seventh Circuit's "lost-chance" theory to reduce the awards, on the ground that not all of the plaintiffs would have been promoted. "[L]ost-chance theory of back-pay calculations, if applicable, would require the finder of fact to estimate the probability that the plaintiffs would have been promoted using a non-discriminatory process, and then reduce the back-pay award to the percentage of the back pay the plaintiff would have received had he or she been certain to be promoted." The Sixth Circuit remands this issue to the district court without ruling on it, though it notes that the ory has no acceptance outside the Seventh Circuit, and There was respectable scholarly opposition to this approach (citing Paul M. Secunda, A Public Interest Model for Applying Lost Chance Theory to Probabilistic Injuries in Employment Discrimination Cases, 2005 WIS. L. REV. 747, 777-83 (2005)).
6. The panel affirms the injunctive relief and appointment of a monitor. Akron argued that it had already abandoned the challenged process, but the panel holds that this does not moot prospective relief:
"Permanent injunctions may be appropriate remedies even when the defendant has taken remedial action because '[a]n employer that takes curative actions only after it has been sued fails to provide sufficient assurances that it will not repeat the violation.' E.E.O.C. v. Goodyear Aerospace Corp., 813 F.2d 1539, 1544 (9th Cir. 1987). But the district court specifically found that Akron had shown 'reluctance to afford plaintiffs relief, even when it is court-ordered relief,' R. 666 at 4 (D. Ct. Order Re Stay of Permanent Inj.) (Page ID #17443)-a factual finding which is not clearly erroneous. The district court did not abuse its discretion by prohibiting Akron from future unlawful discrimination."
The panel also finds that the district court did not clearly err in finding an injunction to be necessary make-whole relief:
"In order to redress the individual harms presented in this case and the complexities involved with crafting a promotional process, the district court concluded that it was best to require that the plaintiffs work with the Court Monitor. That determination is reasonable. The district court believed that requiring Akron to consult with the plaintiffs would ensure that they could address any "obstacles [that] remain for them for future testing, such as lacking the proper amount of time in grade to qualify for that future testing."
It also rejects challenges to the scope of the injunction. The only change it orders is to limit the monitor's term to one promotion cycle.
Finally, both parties joined in a request to have the case reassigned to a new judge, and the Sixth Circuit accepts. It finds that the judge's stubbornness and dilatory rulings made this "an extraordinary case that warrants reassignment." While acknowledging that the parties' litigation tactics contributed to the delay, "the discord appears to be, at least in part, the result of the protracted nature of this litigation to which the district judge has contributed greatly."