Free Reply to Response to Motion - District Court of Colorado - Colorado

Case 1:01-cv-02199-MSK-MEH

Document 437

Filed 06/16/2006

Page 1 of 11

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Case No. 01-cv-02199-MSK-MEH MICHAEL E. CLAWSON and JARED L. DILLON, Plaintiffs, v. MOUNTAIN COAL COMPANY, L.L.C., ARCH WESTERN RESOURCES, L.L.C., and ARCH COAL, INC., Defendants.

PLAINTIFFS' REPLY RE: PLAINTIFF DILLON'S MOTION FOR FRONT PAY AND INTEREST

The plaintiffs, Michael E. Clawson and Jared L. Dillon, through their undersigned counsel, Killian, Guthro & Jensen, P.C., hereby submit Plaintiffs' Reply Re: Plaintiff Dillon's Motion For Front Pay And Interest, and in support thereof, state as follows: I. DEFENDANTS' ANALYSIS OF THE BACKGROUND LAW REGARDING FRONT PAY AND MITIGATION IS FLAWED Front pay is one of the remedies to plaintiffs provided for by 42 USC § 2000e-5(g)(1) for violations of the ADA. Defendants note that the determination an award of front pay, including its amount, is in the discretion of the court. Defendants fail to cite the guiding principle for the exercise of that discretion. "This discretionary power [of the court to award front pay] should be exercised to allow the most complete achievement of the objectives of Title VII attainable under the facts and circumstances of the specific case." Hansel v. Public Servs. Co., 778 F.Supp 1126,

Case 1:01-cv-02199-MSK-MEH

Document 437

Filed 06/16/2006

Page 2 of 11

1135 (D. Colo. 1991).1 The two central purposes of damages in discrimination cases are to deter discrimination, and make victims whole. Albemarle Paper Co. v. Moody, 422 U.S. 405, 419 (1975). The court's exercise of discretion in awarding front pay should be guided by these two objectives. Defendants' analysis of the case law on mitigation is flawed in that it either fails to take account of the facts of the cases, or misinterprets their holdings. None of the Tenth Circuit cases cited by defendants holds that a failure to mitigate, whether by not obtaining work or getting fired, results in the elimination of damages. There is no dispute that a failure to mitigate must be considered in awarding front pay, but that is simply because a failure to mitigate reduces the amount of damages. As the Tenth Circuit stated, "a front pay award . . . must take into account any amount that the plaintiff could earn using reasonable efforts." Carter v. Sedgwick County, 929 F.2d 1501, 1505 (10th Cir. 1991). In other words, front pay is awardable despite a failure to mitigate, but the amount must be reduced to account for the failure. A. Leidel v. Amerpride Servs. Is Not Persuasive

The defendants cite a case from the District for Kansas for the proposition that the court can eliminate front pay based on a failure to mitigate in leaving a job. Leidel v. Ameripride Servs. 276 F.Supp. 2d 1138, 1145-46 (D. Kan 2003). Of course, a case from the District for Kansas is not binding on this court. It appears that the court in Leidel was relying on the Fourth Circuit case of Brady v. Thurston Motor Lines, Inc, 753 F.2d 1269, 1277 (4th Cir. 1985). As explained in Dillon's Motion for Front Pay and Interest, Brady should not be relied upon as persuasive authority. Brady fails to follow the interpretation of the NLRA and Knickerbocker Plastics, which it otherwise relies upon, in determining the effect of a failure to mitigate. Further, the
While Hansel is a Title VII case, the statutory provision for front pay and back pay is identical under Title VII and the ADA.
1

2

Case 1:01-cv-02199-MSK-MEH

Document 437

Filed 06/16/2006

Page 3 of 11

Tenth Circuit has rejected the logic behind Brady. Because Brady is not persuasive authority for the effects of a failure to mitigate, neither are cases such as Leidel, which rely upon Brady. B. Hughes v. Regents of the University of Colorado Is Distinguishable

Defendants also cite Hughes v. Regents of the University of Colorado, in support of their contention that a failure to mitigate may eliminate front pay damages. 967 F.Supp. 431 (D. Colo. 1996). In Hughs the Title VII plaintiff sued over her transfer, even though her transfer was to a position of the same rank, pay, and benefits. Id. at 434. However, the transfer resulted in significantly reduced responsibilities, allowing a finding of discrimination. Id. In an attempt to obtain front pay, the plaintiff asserted that the reduced responsibilities would result in an inability to be promoted to the next highest position. Id. at 434-35. Judge Nottingham rejected this proposal on two bases. First, he found that the conclusion was speculative, and not supported by a preponderance of the evidence. Id. at 435. Second, and alternatively, Judge Nottingham held that her failure to apply for an open promotion, or any other available position, prevented her from obtaining front pay on the basis of being unable to obtain a promotion. Id. This was termed a failure to mitigate. Id. However, it appears to be based more upon the equitable maxim "Equity favors the vigilant and not those who slumber upon their rights or knowledgably seek to capitalize at the expense of others by delay." See Herald Co. v. Bonfils, 315 F.Supp. 497, 503 (D. Colo. 1970) rev'd on other grounds Herald Co. v. Seawell, 472 F.2d 1081 (10th Cir. 1972). The plaintiff did not attempt to protect her rights by seeking an available promotion, and denied the defendant an attempt to correct its wrong. She also denied herself, defendants, and the court, the evidence to determine whether she really would be denied promotion because of her new position. Dillon's position differs greatly from the plaintiff in Hughes. The evidence shows that he was paid less at Oxbow than at 3

Case 1:01-cv-02199-MSK-MEH

Document 437

Filed 06/16/2006

Page 4 of 11

Mountain Coal. The evidence shows that this would have continued into the future even if he had not been fired. Further, Dillon's conduct did not deny defendants a chance to correct their mistakes. The plaintiff in Hughes only suffered damages, if at all, due to her own failure to take action. Dillon would have continued to suffer damages even if he had used adequate efforts to remain employed at Oxbow. C. Johnson v. Spenser Press of Maine, Inc. Favors Dillon's Position

Defendants also cited Johnson v. Spenser Press of Maine, Inc., 364 F.3d 368 (1st Cir. 2004) in support of their position. However, defendants misinterpret the holding of Johnson, because it is inapposite to their position. In Johnson the court "h[e]ld that it is error to cut off, as a matter of law, the ability of a successful Title VII plaintiff to receive further back pay or front pay once he is fired for misconduct from the position he takes after leaving the discriminatory employer." Johnson, 364 F.3d at 372. The Johnson court did hold that the plaintiff's back and front pay were cut off after his termination, but that was because he became 100% disabled from working at no fault of the defendant. Id. at 383-84. The plaintiff in Johnson did not dispute that a disability preventing work, which was not caused by the discriminating employer, cuts off damages. Id. Thus, the plaintiff was not entitled to back pay or front pay. Id. The Johnson court relied in part on the interpretation of the NLRA as explained in Knickerbocker Plastics. Id. at 382. The court also explained its reasoning based on Albemarle Paper as follows: Had there been no discrimination at employer A, the employee would never have come to work (or been fired) from employer B. The discriminating employer (employer A) should not benefit from the windfall of not paying the salary differential when the employee is re-employed by employer C. Id.

4

Case 1:01-cv-02199-MSK-MEH

Document 437

Filed 06/16/2006

Page 5 of 11

The Johnson court noted that even the Fourth Circuit in Brady did not cut off back pay, but only tolled it during the period of unemployment. Id. at 382, FN 15. The Johnson court did not decide whether back or front pay should be tolled during post-termination unemployment or merely reduced, but noted that tolling back pay deviated from the Knickerbocker Plastics rule interpreting the NLRA. Id. FN 15.2 Under the NLRA, as explained in Knickerbocker Plastics, during the period of voluntary unemployment it is assumed the employer continues to make money at his last rate of pay. Id. The court explained that the logic of the Knickerbocker Plastics rule of reducing damages, instead of tolling, is that it puts "the employee in the same position he would have been in had he exercised reasonable diligence in never being fired." Id. Thus, Johnson supports Dillon's position that a subsequent termination for cause does not cut off or eliminate post-termination front pay, but merely reduces it. Johnson also provides support for the use of the NLRB practice of only reducing damages during unemployment post trial unemployment by assuming he continued to earn the pay he earned with his last employer, although Johnson did not go so far as to adopt that methodology.3 II. DEFENDANTS' FACTUAL ANALYSIS REGARDING FRONT PAY IS LIKEWISE FLAWED A. The Jury's Award of $108,000 to Dillon Does Not Indicate That Front Pay Is Inappropriate

Defendants' first argument is based on the speculative premise that the jury, in awarding $108,000, found that Dillon fully mitigated his damages by obtaining alternate employment at Oxbow. As plaintiffs stated in response to defendants' Motion for Application of Statutory Damages Cap . . ., the court should be cautious in speculating as to how the jury arrived at its
The Johnson court noted that it reached the same decision on front pay as back pay for the same reasons. Johnson, 364 F.3d at 384. Thus its discussion of back pay also applies to front pay. 3 The Johnson court did not adopt either the methodology of Brady or Knickerbocker Plastics, as choosing was unnecessary to the resolution of the case.
2

5

Case 1:01-cv-02199-MSK-MEH

Document 437

Filed 06/16/2006

Page 6 of 11

damages figure. Goico v. Boeing Co., 358 F.Supp. 2d. 1028, 1033 (D. Kan. 2005). While defendants' scenario is plausible, it is only one plausible scenario. Plaintiffs described one alternate scenario for the jury's determination in response to defendants' Motion for Application of Statutory Damage Cap . . . . That scenario was based upon the jury finding that Brennan should not have increased Dillon's starting pay from $41,600 to $49,266, and used a simple method to undue Brennan's change. While the methodology was simplified, that is what would be expected of the jury. Another alternative, which is just as reasonable, is that the jury believed Darnell in part and Brennan in part. Darnell testified that if damages for Dillon were based on his advancement from Miner III to Miner I at Mountain Coal, and if Dillon had remained employed at Oxbow, Dillon's back pay losses would be $51,790. This was shown to the jury in Table 7 of demonstrative exhibit 726. (Exhibit 1, p.10 of Darnell Expert Report, Trial Exhibit 726). The jury could have believed this accurately stated Dillon's damages in regard to wages. However, Darnell did not calculate fringe benefits, but Brennan did calculate them. Brennan calculated Dillon's lost fringe benefits as being $55,766. (Exhibit 2, Brennan's Back Pay Report, Trial Exhibit 721). The jury could believe Brennan's figure for lost fringe benefits was correct, especially given the testimony of Darnell in regard to fringe benefits. $51,790 added to $55,766 equals back pay losses of $107, 556, which rounds to $108,000. While Darnell shows complete mitigation in regard to wages, Brennan's report shows mitigation is less than complete when fringe benefits are considered. A comparison of page three of Brennan's report with Table 7 of Darnell's shows that in every year but 2005, Dillon's lost fringe benefits exceed his gain in pay at Oxbow mine.

6

Case 1:01-cv-02199-MSK-MEH

Document 437

Filed 06/16/2006

Page 7 of 11

Plaintiffs will not pretend to know which, if any, of these scenarios is correct. The court should make an independent determination as to whether Dillon would have suffered any continuing losses at Oxbow mine, had he not been fired. The jury's verdict was advisory, so the court obviously will make an independent determination of mitigation. B. Even If A Failure To Mitigate Back Pay Is Found, It Does Not Call For An Automatic Finding Of A Failure To Mitigate Front Pay

Even if defendants are right about the jury's determination about mitigation of back pay, it does not necessarily mean they are correct about front pay. A failure to mitigate back pay is not necessarily a failure to mitigate front pay. Giles v. G.E., 245 F.3d 474, 489-90, 493 & FN 34 (5th Cir. 2001). It would be perfectly permissible for the court to find that defendants had met their burden of proving that absent Dillon's failure to mitigate he would have had no back pay losses after becoming employed at Oxbow, but find that defendants' had not so met their burden in regard to front pay. Id. Therefore, even if the court adopts a finding that Dillon would have completely mitigated his back pay damages had he remained employed at Oxbow, it need not make an identical finding in regard to front pay. The court could find that because defendants have not presented evidence of the effect of Dillon's failure to mitigate on front pay, the court will accept the testimony of Brennan that Dillon would have suffered losses in the future even if he had not been terminated for cause at Oxbow. Even if the court accepts the advisory verdict on back pay, it is uncertain what was the jury's exact rationale. There are several obvious possibilities, and innumerable less obvious ones. However, the court may accept the jury's findings in regard to back pay, yet make its own findings in regard to front pay. This is demonstrated in the Giles case. Back pay and front pay are different and cover different times, so the findings need not be identical. For example, the

7

Case 1:01-cv-02199-MSK-MEH

Document 437

Filed 06/16/2006

Page 8 of 11

court could find that Dillon would advance faster at Mountain Coal than at Oxbow, and he would thus have future damages for a period of time even if he had no back pay losses. Likewise, as the value of fringe benefits increases, the disparity in fringe benefits at Mountain Coal and Oxbow as testified to by Dillon and Brennan, would result in increased future damages until such time as one assumes the losses would cease. C. Brennan's Report Is Admissible And Provides Sufficient Evidence To Award Front Pay Damages To Dillon

Defendants also attack Brennan's front pay report. Plaintiffs acknowledge that it was not submitted at trial, but the court can accept the evidence by motion. In fact, defendants' post-trial motions have requested the court to accept exhibits not submitted at trial as evidence. It would have been inappropriate to include the front pay portions of Brennan's report at trial. They would have been irrelevant because the jury was not giving an advisory verdict on front pay. Further, they would have been unduly prejudicial to defendants because they may have caused jury confusion and an increase in the advisory verdict on back pay. In fact, plaintiffs redacted front pay amounts from the report at the suggestion of defense counsel.4 The court has already determined, after an extensive F.R.E. 702 hearing, that Brennan's opinions as to economic damages, including front pay, are admissible. Brennan testified at trial, on cross-examination, as to how he determined the differences in pay and benefits that Dillon would have received at Mountain Coal with what he would have received had he continued at Oxbow. Brennan testified that he obtained this information from Dillon or documents coming from Dillon. This testimony was in relation to back pay, but is equally applicable to front pay.

This suggestion by defendants means that they are estopped from claiming that Brennan's report on front pay may never be submitted as evidence. It appears that defendants are only suggesting it should not be accepted by the court on motion, which runs counter to their own practice in their own post-trial motions. To the extent defendants are making a broader claim of inadmissibility, the court should find they are estopped from so doing.

4

8

Case 1:01-cv-02199-MSK-MEH

Document 437

Filed 06/16/2006

Page 9 of 11

There was no motion at trial to strike the testimony as being based on insufficient facts or data. Brennan also testified, at trial and at the F.R.E. 702 hearing as to his methodology. Brennan is also familiar with the data on the pay and benefits at the mines because he works extensively with injured miners as part of his vocational rehabilitation practice. Experts in every field rely upon their experience. The report of Brennan, submitted as exhibit 1 to Dillon's Motion for Front Pay and Interest, is admissible and should be accepted as evidence of Dillon's front pay losses. Brennan's report shows that the present value of Dillon's future lost wages is $25,629. The present value of Dillon's lost fringe benefits is $32,410. Therefore, Dillon should be awarded $58,039 in front pay. Plaintiffs' believe that the court has sufficient evidence to award front pay to Dillon without holding a hearing. Brennan's report constitutes admissible evidence regarding Dillon's front pay losses. The court has heard extensive evidence, both at the F.R.E. 702 hearing and at trial, on Brennan's qualifications, assumptions, and methodologies. Defendants do not state what additional or contrary evidence they would submit on the issue. Defendants' sole argument appears to be based on the legal unavailability of front pay or the inadmissibility of Brennan's opinions. Defendants are incorrect on both issues, so it is not clear a hearing is necessary. However, as stated in Dillon's motion, plaintiffs do not object to the court holding a hearing on front pay if the court determines it would be helpful or is necessary. RESPECTFULLY SUBMITTED this 16th day of June, 2006.

s/J. Keith Killian J. Keith Killian Damon Davis Killian, Guthro & Jensen, P.C. 225 N. 5th Street 9

Case 1:01-cv-02199-MSK-MEH

Document 437

Filed 06/16/2006

Page 10 of 11

Grand Junction, CO 81501 Telephone: (970) 241-0707 FAX: (970) 242-8375 E-mail: [email protected] Attorney for Plaintiffs Michael E. Clawson and Jared L. Dillon

10

Case 1:01-cv-02199-MSK-MEH

Document 437

Filed 06/16/2006

Page 11 of 11

UNITED STATES DISTRICT COURT FOR THE DISTRIT OF COLORADO CERTIFICATE OF SERVICE (CM/ECF) I hereby certify that on June 16, 2006, I electronically filed the foregoing with the Clerk of Court using the CM/ECF system, which will send notification of such filing to the following e-mail addresses: [email protected] [email protected] and, I hereby certify that I have mailed or served the document or paper to the following non CM/ECF participants in the manner (mail, hand-delivery, etc.) indicated by the non-participant's name: Mr. Michael Clawson 38506 Back River Road Paonia, CO 81428 Mr. Jared Dillon 35404 Back River Road Hotchkiss, CO 81419 Mail

Mail

s/J. Keith Killian J. Keith Killian Attorney for Plaintiffs Killian, Guthro & Jensen, P.C. 225 N. 5th Street Grand Junction, CO 81501 Telephone: (970) 241-0707 Fax: (970) 242-8375 [email protected]

11