The Third Circuit drops two opinions today notable in their awful badness for civil rights litigation. The first holds that in setting a prevailing-party’s reasonable attorney’s fee under § 1988 (and by extension, many other fee-shifting statutes), a district court may consider as a factor that the plaintiff turned down a courthouse-steps offer to settle. The second tosses class certification in a major piece of disability-rights litigation against UPS.
Lohman v. Duryea Borough, No. 08-3524 (3d Cir. July 23, 2009): Here are the facts in a nutshell —
“Nicholas Lohman brought an action asserting numerous claims relating to his discharge from employment with Duryea Borough. Only three First Amendment retaliation claims survived summary judgment and proceeded to trial. Defendants made three settlement offers after trial commenced, including one for $75,000.00. Lohman rejected each of these offers. The jury found for Lohman on one of the three claims, and awarded him $12,205.00 in lost wages and nominal damages. Lohman moved for attorney’s fees and costs of $112,883.73.”
The district court calculated a lodestar amount of some $62,000, but chopped the fee to $30,000, citing the limited success (only one claim prevailed) and the $75,000 offer.
Affirming the fee award, the panel holds that Federal Rule of Evidence 408 (regarding communication of settlement offers) does not prevent the district court from considering settlement communications in evaluating the degree of success. On this score, the panel makes the valid point that settlement offers are only barred as evidence of “liability for, invalidity of, or amount of a claim that was disputed.” (A little-regarded fact of so-called “FRE408” communications is that — at least in federal court — they are not “privileged” and can be used as evidence beyond the limited prohibition in this rule.)
But the panel gets off-track, I think, by holding that “permitting settlement negotiations to be considered would encourage reasonable and realistic settlement negotiations.” Here I would differ: if this standard takes root (and we can hope that it does not), settlement discussions in civil rights cases become public events. Disputes will arise about whether offers were made, all communications will have be made defensively in writing and everyone will know that their every word can become public. Lawyers may, in essence, stop talking to each other frankly about settlement. The nastiest part of this decision is the wedge that it drives into the attorney-client relationship. Now the plaintiff’s lawyer, looking in the rear-view mirror, must worry that refusing an offer improvidently in hindsight can be a 50% or more tax on the fee.
Hohider v. UPS, Inc., No. 07-4588 (3d Cir. July 23, 2009): Case number two is a Fed. R. Civ. P. 23(f) appeal of certification of an ADA class. This appeal attracted extraordinary attention, with five amicus briefs filed and a retired Supreme Court justice (Sandra Day O’Connor) sitting as a panelist. The net result for plaintiffs was a near-total reversal, bringing the panel to the brink of holding that no ADA case is ever worthy of Rule 23 certification.
The plaintiffs challenged what they called a “100% healed” policy — that UPS would not allow employees returning from disability leave to resume their jobs without unconditional release from any medical restrictions. Concomitantly, the plaintiffs challenged UBS’s systemic failure to engage in any interactive process with persons with disabilities returning to the workplace. The district court certified the following claim:
“Those persons throughout the United States who: (i) according to the records of UPS, its agents and contractors, have been employed by UPS at any time since May 10, 2000, including those employees who were absent from work and were receiving either workers’ compensation or short or long term disability insurance benefits; and (ii) have been absent from work because of medical reasons; and (iii)(A) did not return to work by reason of UPS’s alleged 100% healed policy; or (B) did not return to work by reason of UPS’s allegedly discriminatory implementation of its formal ADA compliance policy; or (C) did not return to work by reason of the allegedly discriminatory use by UPS of uniform pretextual job descriptions.”
The panel, on review, found insurmountable defects in this case. The primary defect it found was the importing of a method of proof familiar under Title VII — the Teamsters/Franks pattern-or-practice framework — to the ADA arena. Under Teamsters, once a class establishes that race or sex discrimination is the employer’s “standard operating procedure,” the court may enter a finding in the class’s favor that — in a second phase of litigation — allows each class member to obtain relief unless the employer can prove (as an affirmative defense) that the class member would not have been treated any differently in a non-discriminatory workplace.
The problem of transferring this framework into the ADA setting is that while race and gender are still regarded by courts as bipolar (black/white, male/female), the ADA definitions of “qualified individual” and “disability” (i.e. an impairment placing a substantial limitation on one or more major life activities) shades into countless degrees of the spectrum. Thus it is impracticable — for Rule 23 purposes, anyway — to construct a class or claim made up of folks who are “disabled” under that Act. (Caveat — nothing would preclude the EEOC as an agency from bringing a pattern-or-practice case, which it is authorized to do by statute and void of the necessity of proving the Rule 23 elements.)
As the panel summarizes:
“Having reviewed plaintiffs’ claims in light of the substantive requirements of the ADA, we find those claims cannot be adjudicated within the parameters of Rule 23 such that a determination of classwide liability and relief can be reached. Rather, establishing the unlawful discrimination
alleged by plaintiffs would require determining whether class members are ‘qualified’ under the ADA, an assessment that encompasses inquiries acknowledged by the District Court to be
too individualized and divergent with respect to this class to warrant certification under Rule 23(a) and (b)(2). Contrary to the court’s determination otherwise, the Teamsters framework
cannot, by its own force, cure this flaw in the class. Accordingly, the court’s grant of class certification was an abuse of discretion.”
The panel finds that Title VII and the ADA address materially different harms which renders the Teamsters framework a poor fit under the latter act:
“The ADA does not define the scope of its protections and prohibitions as broadly as Title VII. As noted, Title I of the ADA prohibits covered employers from discriminating against qualified individuals with disabilities because of their disabilities, a prohibition that includes failing to reasonably accommodate such individuals. See 42 U.S.C. § 12112(a), (b)(5). In contrast to Title VII, it does not prohibit discrimination against any individual on the basis of disability, but, as a general rule, only protects from discrimination those disabled individuals who are able to perform, with or without reasonable accommodation, the essential functions of the job
they hold or desire.”
One flaw in the class, the panel thus finds, is the instability of the class definition:
“The class, as defined, contains no unifying or limiting criteria-with respect to employment positions held or desired, for instance, or conditions suffered, or accommodations sought-that potentially would permit classwide evaluation of whether each member of the class is ‘qualified’ and thus can perform the essential functions of a given job with or without reasonable accommodation. Nor does proof of the existence of the policies alleged in plaintiffs’ claims resolve these inquiries.”
In principle, this would leave open the prospect of a narrower class or classes made of those holding a particular job (truck driver) or a particular disability (cancer). But the panel seems to hold elsewhere that there would be too many variables to juggle, even within the confines of a small group.
“By the plain language of 42 U.S.C. § 12112(b)(5), whether UPS unlawfully discriminated against employees by failing to grant reasonable accommodations cannot be determined without assessing whether those employees are ‘otherwise qualified individuals with disabilities.’ If a disabled employee cannot perform the essential functions of the job he
seeks or desires with or without an accommodation that is reasonable and that does not impose an undue hardship on the employer, then under the terms of the ADA, the employee is not entitled to an accommodation and the employer does not ‘discriminate’ against the employee in failing to grant him one.”
Amazingly, where this would seem to leave us is that even if UPS posted a “no diabetes” hiring policy on its website, no group of individuals with diabetes could challenge the policy as a class action. Or maybe it’s not so amazing: the panel decision would not prevent a single employee with diabetes from challenging the policy and seeking injunctive relief within the setting of an individual, disparate treatment case. The panel observes:
“We have not previously addressed whether ‘100% healed’ policies constitute per se discrimination under the ADA, and we need not do so here. Even if we were to adopt
that theory, we do not believe plaintiffs can reach a determination of unlawfulness under the ADA by proving only the existence of a ‘100% healed’ policy, without any inquiry into whether that policy has been used to discriminate against individuals protected by the ADA from such discrimination.”
But the utility of a class case is getting the entire issue resolved for the whole group, rather than piecemeal. That’s what you lose under this decision.
Incidentally, the issue of the retroactive effect (if any) of the ADAA of 2008 arose in a footnote. The panel found that there was no cause to decide that issue:
“As we will discuss, plaintiffs’ inability to demonstrate on a classwide basis that all class members are ‘qualified’ under the ADA renders certification of the class improper. The ADAAA is silent as to this statutory element, neither removing it nor otherwise purporting to amend its definition or construction. See, e.g., id. § 5(a), 122 Stat. at 3557 (to be codified at 42 U.S.C. § 12112) (amending § 12112(a) and (b)’s prohibition of discrimination against a ‘qualified individual with a disability because of the disability of such individual’ to prohibit discrimination against a ‘qualified individual on the basis of disability’). Accordingly, even if we were to apply the ADAAA to plaintiffs’ claims in the manner they desire, it would not affect our determination that the class was improperly certified. As such, we decline to resolve whether the ADAAA and its amendments apply to plaintiffs’ claims. For the sake of consistency with the District Court’s analysis, we have cited to the pre-ADAAA version of the ADA in our analysis. This does
not reflect any determination regarding the applicability of the ADAAA to plaintiffs’ claims.”