Free Response to Motion - District Court of Colorado - Colorado


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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.

RESPONSE TO DEFENDANTS' MOTION FOR APPLICATION OF STATUTORY DAMAGE CAP TO COMPENSATORY DAMAGE AWARDS AND FOR REDUCTION OF ADVISORY BACK PAY AWARDS

The plaintiffs, Michael E. Clawson and Jared L. Dillon, through their undersigned counsel, Killian, Guthro & Jensen, P.C., hereby submit their Response To Defendants' Motion For Application Of Statutory Damage Cap To Compensatory Damage Awards And For Reduction Of Advisory Back Pay Awards, and in support thereof, state as follows: I. THE APPROPRIATE DAMAGE CAP FOR COMPENSATORY DAMAGES IN THIS CASE IS $300,000 PURSUANT TO 42 USC § 1981a(b)(3) A. Defendants Have Not Submitted Admissible Evidence Showing That They Had Fewer Than 501 Employees

Defendants are attempting to use 42 USC § 1981a(b)(3) to reduce the damages awarded to plaintiffs by the jury. If they have more than 500 employees, then the damage cap is $300,000. It is defendants' burden to prove they have fewer than 501 employees. Hamlin v. Charter Township of Flint, 965 F.Supp. 984, 988 (E. D. Mich. 1997); Jones v. Rent-A-Center,

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Inc., 281 F.Supp. 2d 1277, 1287 (D. Kan. 2003). Defendants, in footnote 3, apparently concede that this is their burden. Plaintiffs do not dispute that it is appropriate to submit evidence on the issue of the number of employees after the trial, because the jury is not to know of the damage caps. Additionally, plaintiffs do not dispute that the relevant time frame is from 1998-2000. Because this determination requires findings, the rules of evidence and civil procedure apply. F.R.E. 101, 1101; Fed. R. Civ. P. 1. 1. The Sherrie Eastwood Affidavit is Inadmissible

The only evidence submitted by defendants purporting to show they have less than 501 employees is the affidavit of Sherrie Eastwood; defendants' exhibit 1. The affidavit states that based on Eastwood's review of documents, she concludes that defendants combined had less that 501 employees from the last quarter of 1998 through December of 2000. This affidavit is inadmissible for a variety of reasons, and may not be considered by the court in determining whether the defendants had less than 501 employees. First, Sherrie Eastwood has never been disclosed by the defendants. (Exhibit 1 through Exhibit 6, Defendants' non-expert disclosures). Likewise, defendants have never disclosed the Oracle software system or the Oracle employee documents referenced in the affidavit. (Exhibit 1 through Exhibit 6). Fed. R. Civ. P. 26(a)(1) requires defendants to disclose all documents and witnesses with discoverable information that they intend to use to support a claim or defense. The damage cap is clearly a defense against plaintiffs' damages. Rule 26(e) requires that the disclosures be supplemented when necessary. Defendants did not disclose Eastwood or the documents she relies on at any time. The only evidence defendants disclosed regarding the number of employees were the EEO reports. Plaintiffs relied on the reports and did not conduct further discovery based on the fact that these reports were all the evidence defendants would use. 2

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Fed. R. Civ. P. 37(c)(1) provides in relevant part: A party that without justification fails to disclose information required by Rule 26(a) or 26(e)(1) . . . is not, unless such failure is harmless, permitted to use as evidence at a trial, at a hearing, or in a motion any witness or information not so disclosed. (emphasis added). The court is obligated to exclude from evidence documents or testimony from witnesses that was not disclosed, unless the failure to disclose was substantially justified or harmless. Jacobson v. Deseret Book Co., 287 F.3d 936, 953 (10th Cir. 2002); Trujillo v. Board of Ed., 230 F.R.D. 657, 660 (D. N.M. 2005). The rule states that it applies to motions as well as trials and hearings, and it has been enforced to exclude documents and affidavits from consideration in motions. Adams v. Teck Cominco Alaska, Inc., 231 F.R.D. 578 (D. Alaska. 2005); Save the Valley, Inc. v. E.P.A., 223 F.Supp. 2d 997, 1002 fn 5 (S.D. Ind. 2002). As the failure to disclose is defendants, it is their burden to show that the failure is substantially justified or harmless. Sender v. Mann, 225 F.R.D. 645, 655 (D. Colo. 2004); Saudi v. Valmet-Appleton, Inc., 219 F.R.D. 128, 132 (E.D. Wis. 2003). Defendants cannot show substantial justifications. Their exhibit 4, an April 2003 affidavit from Pat Madras shows they were aware of the issue regarding the number of employees in 2003. Defendants cannot show that the failure to disclose is harmless, as plaintiffs have had no opportunity to conduct discovery or prepare to address this new information. Saudi, 219 F.R.D. at 134. It is far too late to reopen discovery and incur additional delays and expense at this point in time. Id. The affidavit and documents should be excluded under rule 37(c), and should not be considered by the court. The affidavit is inadmissible for other reasons as well. It is apparent on the face of the affidavit that Eastwood is not testifying from her own knowledge as to the number of employees, but is repeating what she learned from documents. This violates F.R.E. 602 and 802. There has

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been no foundation laid that records she relies on are business records under F.R.E. 803(6), and they are therefore hearsay. The affidavit does not constitute a permissible summary under F.R.E. 1006. To be a permissible summary, all of the underlying documents must be admissible. State Office Sys., Inc. v. Ollivetti Corp. of Am., 762 F.2d 843, 845 (10th Cir. 1985). There has been no foundation for the documents under F.R.E. 803(6), and the documents are inadmissible because they were not disclosed. There has been no showing that Eastwood's "summary" is accurate. Finally, the underlying documents have not been made available to plaintiffs as required by F.R.E. 1006. The affidavit not only falls afoul of Rule 37(c), but also falls afoul of several rules of evidence. It is inadmissible and should not be considered. 2. The Admissible Evidence Shows That Defendants Had Over 500 Employees

The best, admissible, evidence of the number of employees at Arch Coal and Mountain Coal is the EEO-1 reports of the two entities. These were trial exhibits 99-102, and they were stipulated as admissible.1 While not admitted at trial, plaintiffs request the court accept them as evidence now. Trial Exhibit 99 shows Arch Coal's had 234 employees in 1999. (Ex.7, Arch Coal 1999 EEO-1 Report). Trial Exhibit 100 shows Mountain Coal has 292 employees in 1999. (Ex. 8, Mountain Coal 1999 EEO-1 Report). This totals 526 employees, without including Arch Western Resources. Trial Exhibit 101 shows Mountain Coal has 280 employees in 2000. (Ex. 9, Mountain Coal 2000 EEO-1 Report). Trial Exhibit 102 shows Arch Coal had 297 employees in 2000. (Ex. 10, Arch Coal 2000 EEO-1 Report). This totals 574 employees for 2000. Thus, the combined totals are over 500 for both 1999 and 2000.

Defendants' stipulation concerning exhibits 99 and 102 was contingent on the submission of the affidavit of Pat Madras. Her affidavit was submitted by defendants as defendants' exhibit 4. Therefore, the contingency has been satisfied.

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Defendants cite the Madras affidavit as impeaching these figures. However, Madras simply says the numbers "do not necessarily accurately reflect the number of employees." Defendants' Exhibit 4. The affidavit does not state the EEO-1 reports are inaccurate, it simply expresses uncertainty as to the accuracy. Further, the affidavit does not state whether, or by how much, the EEO-1 reports overstate the number of employees. Even if the EEO-1 reports do overstate the number of employees, the Madras affidavit does not state that the true number would be less than 501 total employees. Finally, if the EEO-1 report for Arch Coal includes Mountain Coal or Arch Western Resources (AWR) employees who happen to be in St. Louis, then for those employees there is not an overstatement, because they should be included anyway. Additionally, there is the deposition testimony of Shanks. Shanks deposition was read at trial. Shanks was a Vice President at Arch Coal, president of AWR, and a director of Mountain Coal. He was also DiClaudio's boss, as testified to by both Shanks and DiClaudio. Shanks testified in his deposition that Mountain Coal had approximately 325 employees in 2002. (Ex. 11, p.21, Shanks Deposition). He testified that he believed that the number of employees had gone down since 1998 and 1999. (Ex. 11, p.21, Shanks Deposition). If Shanks is correct, and Mountain Coal employed more than 325 employees in 1998 and 1999, then even using Eastwood's figures for Arch Coal, the combined total for Arch Coal and Mountain Coal would likely exceed 500. While Shank's numbers would exceed those listed on the EEO-1 forms, if the court is going to accept testimony over the forms, it should accept the testimony of Shanks as well. Finally, if the court does not strike or otherwise exclude the Eastwood affidavit, it should be given very little weight. It does not attempt to address the first three quarters of 1998, which constitute more than twenty weeks. There is no evidence for a substantial portion of the relevant 5

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time frame, and if defendants have more than 500 employees in any twenty weeks in one relevant year, then the $300,000 cap applies. 42 U.S.C. § 1981a(b)(3). The Eastwood affidavit is clearly self-serving and from a partisan and employee of defendants. None of the underlying information or documents were provided. Neither Eastwood nor the documents were disclosed, so there has been no chance to test Eastwood's credibility or the accuracy of her statements. Thus, if her affidavit is not excluded or stricken, it should be given less weight than the EEO-1 reports. 2. Sufficient Evidence Was Submitted to Find Canyon Fuel Integrated With Arch Western Resources and Mountain Coal

Defendants have not demonstrated that they have fewer than 501 employees, and it should be unnecessary to consider integration between any of the defendants and any of the other subsidiaries of Arch Coal or AWR. However, in the event the court finds that defendants have proved by a preponderance of the evidence that they had fewer than 501 employees at the relevant time, the court should also consider the employees of Canyon Fuel. Plaintiffs have presented sufficient evidence for the court to find Canyon Fuel integrated with Mountain Coal and AWR. Non-party [non-defendant] entities may be aggregated with party [defendant] entities for purposes of determining the number of employees. Player v. Nations Biologics, Inc., 993 F.Supp. 878, 882 & FN 5 (M.D. Ala. 1997); Landon v. Agatha Harden, Inc., 6 F.Supp. 2d 1333, 1338-39 (M.D. Ala. 1998); Story v. Vae Nortrak, Inc., 214 F.Supp. 2d 1209, 1210 (N.D. Ala. 2001). So long as the non-parties are jointly owned by a party, or by the owner of a party, there is no problem with lack of notice, and the non-party entities cannot claim lack of notice. Player, 993 F.Supp. at 882 FN 5; Landon, 6 F.Supp. 2d at 1339. Subsidiaries may be grouped together for

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purposes of counting employees if the parent company is integrated with each subsidiary. Landon, 6 F.Supp. 2d at 1337-38; Story, 214 F.Supp. 2d at 1210; Eichenwald v. Krigel's, Inc., 908 F.Supp 1531, 1559 (D. Kan 1995). The court may make findings of fact on whether the non-party entities are integrated with the named defendants for purposes of determining the number of employees under the damages cap. Story, 214 F.Supp. 2d at 1210. Plaintiffs are not trying to hold one subsidiary liable for the conduct of another, as defendants allege. This is because plaintiffs cannot collect damages from the non-party entities, only from the named defendants. Player, 993 F.Supp. at 882 FN 5; Landon, 6 F.Supp. 2d at 1339. Instead, plaintiffs are asserting that the true size of the company, as an integrated enterprise, is such that it can afford to pay the maximum damages under the cap. The purpose of the caps is protect small employers against potentially devastating compensatory damage awards. Dowd v. United Steelworkers of Am., 253 F.3d 1093, 1100 (8th Cir. 2001). The number of employees is indicative of the size and resources of the employer, and thus its ability to pay the damages. Id. Therefore, it is logical to allow integration of non-party entities with the responsible defendants for purposes of the damages cap, because it is more indicative of the true ability of the defendants to pay. It is undisputed that AWR owns 100% of Mountain Coal and 65% of Canyon Fuel. (Ex. _, Trial Ex. 85, Arch Coal Corp. Structure). The 65% ownership gives AWR majority control over Canyon Fuel. The evidence presented at trial creates the inference that all of the AWR subsidiaries, including Canyon Fuel, have the same employee benefits. Shanks, through his deposition, testified that the Summary Benefits Plan was and AWR plan. DiClaudio testified that the plan came from AWR. The plan itself states AWR, indicating it is from Arch Western

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Resources. The logical inference is that all of the subsidiaries of AWR have the same benefits and use the same summary benefits plan description. There is evidence of transfers between Mountain Coal and Canyon Fuel. Shanks testified that there were transfers among the AWR subsidiaries. Tweddell, through his deposition, testified that he transferred from Mountain Coal to Canyon Fuel. Defendants are likely to argue that because Tweddell filled out an application and interviewed at Canyon Fuels, he was not really transferred. However, Tweddell also testified that he put in an application and interviewed when transferring from the Mountain Coal warehouse into the Mountain Coal mine. There was also evidence that one had to apply or interview to transfer from the mine to the warehouse. Therefore, the interview and application at Canyon Fuel do not negate the evidence that Tweddell's transfered. Furthermore, Langrend testified that he, as H.R. Director, put up Canyon Fuel job postings at Mountain Coal. While there was dispute as to whether he did this pursuant to a particular policy, there is no dispute that he did it. There is evidence of common management between AWR, Mountain Coal, and Canyon Fuel. Defendants submitted information on the Officers and Directors of AWR, Mountain Coal, and Canyon Fuel in response to interrogatories. Interrogatory responses are admissible as admissions of a party opponent. Mellius v. National Indian Gaming Comm'n, 2000 U.S. Dist. LEXIS 22747,pages *3 - *4 (D. D.C. July 21, 2000) (Ex. 12). Plaintiffs have included the answer and the pertinent parts of Interrogatory Response Exhibit 5 incorporated into the response. Defendants' fourth amended response to plaintiffs first set of interrogatories, and exhibit 5 thereto, indicate six individuals were either officers or directors of AWR, Mountain Coal, and Canyon Fuel, and one individual was a director of both Mountain Coal and Canyon Fuel. (Ex. 13, Fourth Amend Answer to First Interrogatories) The six individuals are Shanks, 8

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Florczak, Jones, Messey, Hogan, and Rose, the one individual is Woodring. The amended supplemental answer submitted in 2005 shows that five individuals were officers or directors of AWR, Mountain Coal, and Canyon Fuel, while two individuals were officers or directors of Mountain Coal and Canyon Fuel. (Ex. 14, Amended Supplemental Answer to Interrogatory No. 7) The five individuals are Shanks, Florczak, Steel, Horgan, and Mermis. The other two individuals are DiClaudio and Woodring. While neither interrogatory corresponds exactly with the 1998 through 2000 time period, the continuing existence of overlapping management, along with joint ownership, raises and inference that such overlapping management existed in the 1998-2000 time frame. The evidence as a whole shows that Canyon Fuel was integrated with both Mountain Coal and AWR. Therefore Canyon Fuel's employees should also be considered for the damage cap. DiClaudio testified in his deposition that Canyon Fuel has three coalmines. (Ex. 15, p.11, DiClaudio Deposition). The smallest has between 100 and 150 employees and largest has between 300 and 350 employees. (Ex. 15, p.14) Combined with Arch Coal's, Mountain Coal's, and AWR's employees, the total is well over 500 employees. If the court chooses to allow the Eastwood affidavit, and does not find that Canyon Fuel is integrated with the defendants, the court should allow limited discovery on the subject of the number of employees and integration of Arch Coal and AWR with their other subsidiaries. It would be unfair to allow defendants to use undisclosed evidence, and not allow plaintiffs an opportunity for additional discovery. II. THE COURT SHOULD ADOPT THE JURY'S ADVISORY BACK PAY VERDICT, AS THE JURY IS THE BEST JUDGE OF CREDIBILITY AND ITS DECISION WAS BASED ON SUBSTANTIAL EVIDENCE

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Defendants spend most of their argument in regard to back pay damages rearguing the evidence, contesting the jury's findings both the binding and advisory, and attempting to change their trial strategy. Defendants frequently misstate the evidence presented at trial in an attempt to get out of paying the full back pay damages. Defendants present no legitimate reason, based on the evidence presented at trial, to deviate from the jury's determinations. A. Defendants Present No Reason To Disregard The Jury's Determination That Brennan's Calculations Are More Credible And That His Opinions Cary More Weight

Defendants present no basis to find Darnell more credible than Brennan other than their own ipse dixit conclusion. This court has already found that Brennan is qualified to give expert opinions on economic damages. In fact, he has done so in several cases, including in other Federal Court cases. This court also found that his methodology was reasonably reliable and the opinions given at trial to be admissible under F.R.E. 702. Defendants attempt to revisit this issue, but give no reason for so doing. Defendants complain that Brennan changed his methodology between different reports and at different times. "A foolish consistency is the hobgoblin of little minds . . ." Ralph Waldo Emerson, "Self Reliance." To use consistent methodologies, when the circumstances justifying their use change, would be foolish. As explained by both Brennan and Dr. Don Vogenthaler, it is appropriate to use different methodologies depending on the circumstances and information available. It is not surprising that circumstances would change between Brennan's first report in 2002, and trial in 2006. Defendants presented evidence of his changes in methodology during cross-examination. Brennan explained the reasons he changed methodologies, and his reasons were sound. It appears the jury found Brennan credible. The combined experience and wisdom

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of eleven jurors made the jury the best judge of credibility in the courtroom, and that is why juries have been used for centuries. There is also substantial evidence that Darnell's testimony was not credible. Granted, Darnell has a doctorate, but a formal degree is not the sole measure of credibility. If Darnell did not properly use his expertise, it means nothing to say that he has it. Darnell testified that the appropriate way to assess economic damages is to look at prior years, to determine what the plaintiff would have earned but for the termination. This is what Brennan did. Darnell testified that he only looked at the last full year worked by Clawson and Dillon because defense counsel only gave him pay information for the last full year worked by Clawson and Dillon. Defendants state in their motion that Darnell did not consider fringe benefits or overtime because he lacked the information. This is a misstatement of the evidence presented at trial. Darnell testified that it was appropriate to consider fringe benefits in calculating back pay, and that an economic expert could calculate such amounts based on government or employer information. Darnell testified that he, unlike Brennan, did not consider fringe benefits; he did not because Jeff Johnson, defense counsel, told him not to. Darnell also testified that it was appropriate to consider overtime, which is what Brennan did. Darnell testified that he did not consider overtime because Jeff Johnson, defense counsel, told him not to. He also testified that he doubted that Jeff Johnson was an economist. If Darnell does not obtain all of the information he needs, but only what defense counsel will allow him, he cannot use his expertise appropriately. If Darnell is doing what he is told, instead of what his expertise tells him to do, he is not using his expertise. There was good reason for the jury to discount Darnell's calculation, in favor of Brennan's, and for the court to do so as well.

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B.

Defendants' Analysis In Regard To Clawson Is Fatally Flawed 1. It Is Appropriate To Use The Miner I Pay Rate

Defendants attempt to argue that there is no evidence justifying the use of the Miner I pay scale. This is incorrect. While the jury may have used the Miner I pay rate, the court should be cautious in speculating as to the jury's thought processes. Goico v. Boeing Co., 358 F.Supp. 2d. 1028, 1033 (D. Kan. 2005). There was substantial testimony at trial that Miner I, II, and III, were pay grades applicable to a wide variety of jobs. The testimony of Tweddel, Bartlett, and Clawson substantiates that one can advance from Miner III to Miner I while performing one primary duty or job at the mine. The prerequisites are experience, learning jobs skills and improving. There was evidence that one had to learn many skills to advance, but the weight of the evidence was that an employee was not actually required to use the skills, but could advance within one job. Clawson had already advanced to Miner I, therefore it is reasonable for the jury to conclude his losses should be calculated based on the Miner I pay scale. Defendants state that Clawson did not suggest at the May 18, 1999, meeting that he could go back to materials handling. They also state he did not suggest then or at any other time prior to his termination that he could go back to a Miner I job. First, the notes taken at the meeting were lost, leaving uncertainty as to what was or was not said. Second, this misstates Clawson's duty under the ADA. Clawson did not have to identify a reasonable accommodation at the time he sought accommodation. Smith v. Midland Brake, 180 F.3d 1154, 1179 (10th Cir. 1999). Instead, defendants are supposed to engage in an interactive process with him and identify possible accommodation for or with him.

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The evidence shows that Clawson could have been accommodated in a Miner I position. The evidence established that Fuel Hauler was a regular position at the mine. The evidence from Clawson's physicians was that he was essentially unrestricted, and could do any position at the mine. The evidence showed that Clawson could perform the essential functions of a Miner or Mechanic, with or without accommodation, as those functions are described in admitted trial exhibits 88 and 90. Additionally, to the extent the jury's use of the Miner I pay rate is an implicit finding he could have been accommodated as a Miner I, that finding is binding upon the court. Smith v. Difee Ford-Lincoln-Mercury, Inc., 298 F.3d 955, 964-966 (10th Cir. 2002). Difee explains that the jury's findings on legal issues are binding on the court's subsequent equitable determinations in the same case. Id. Defendants argue, again, that a complex special verdict form should have been used. The court gave a good explanation of why defendants were incorrect, and the courts' decision is supported by the Tenth Circuit. Kelley v. Metallics West, Inc., 410 F.3d 670 (10th Cir. 2005). "Metallics West . . . tendered a complex special verdict form . . . The district court . . . rejected the special verdict form." Id. at 673-74. "The district court did not err . . . in rejecting the tendered special verdict form . . ." Id. at 676. Defendants seek to have exhibit 723 admitted as substantive evidence, even though it was not so offered at trial, and was not admitted at trial. The court should reject this attempt, and all other attempts to submit new evidence on the back pay issue. Both sides had the chance to submit all admissible evidence and to fully litigate the back pay issue. The parties should not get a second chance just because they do not like the result of their trial strategy. Defendants submit that there were, above ground accommodations that Clawson should have been given instead of Miner I. However, the law is, and the jury was instructed, that Clawson should be accommodated in an equal position first, and only if that is not possible should he be 13

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accommodated in a lower paying position. Midland Brake, 180 F.3d at 1177. Defendants do not suggest what the back pay difference would be for any above ground position but warehouse tech, and any uncertainty in this regard must be borne by defendants. Metz v. Merrill Lynch, Pierce Fenner & Smith, Inc., 39 F.3d 1482, 1494 (10th Cir. 1994)

2.

Defendants Should Not Be Allowed To Present New Evidence Regarding Lost Fringe Benefits When That Issue Has Been Fully Litigated

Defendants seek to present the affidavit of Scanlon, with attachments, as new evidence on the issue of lost fringe benefits. Defendants make the completely unsupported statement that they are allowed to do so, even though there has been a trial on the issue. Defendants give no good reason why this information could not be presented at trial. Defendants claim it was tied up with the issue of collateral sources. However, there is a difference between the earning of benefits as part of pay, and the receipt of payments as a result of those benefits. This is the distinction between the earning of the fringe benefit and receipt of money from the benefit already earned. It is apparent that defendants' trial strategy was to ignore the issue of fringe benefits, and hope the advisory jury would not figure them into damages. This is evident from the instruction to Darnell to ignore fringe benefits. Defendants made a choice based on trial strategy and cannot complain now that it did not work. Johnson v. Colt Indus. Op. Corp., 797 F.2d 1530, 1535 (10th Cir. 1986). Defendants, having already been fully heard, should not now be allowed to shift course and present new evidence due to a failed trial strategy. This is especially true when plaintiffs have no opportunity to question Scanlon on this issue. Finally, even if the court were to accept the affidavit of Scanlon, defendants have laid no foundation for the admissibility of the

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documents attached to the affidavit. These attachments should be stricken or excluded regardless of the court's treatment of the affidavit. 3. Defendants Arguments About The Excessiveness Of The Verdict Are Unpersuasive And Should Be Rejected By The Court

Defendants first argue that Brennan's figures are too high because he unjustifiably used the amount Clawson earned in 1997 to determine what Clawson would have earned had he not been fired. This argument is unpersuasive. Darnell, defendants' expert, testified on crossexamination that it was appropriate to go back a couple years prior to the date of termination and consider those figures in determining what the plaintiff would have earned but for the termination. This is what Brennan did. Further, trial exhibit 708, admitted into evidence, shows that 1997 is a more representative year for what Clawson would have earned if he had continued at Mountain Coal. (Ex. 16, Clawson Wage Summary). In 1995 Clawson earned $71, 244.58, in 1996 he earned $78,054.47, and in 1997 he earned $64,591.26. (Ex. 16, Clawson Wage Summary). In 1998, a year in which Clawson was injured, missed work, and worked light duty, he only earned $46,741.28, the lowest amount he earned in a full year at Mountain Coal. (Ex. 16, Clawson Wage Summary). It is no wonder defendants want to use 1998. Based on the entire time that Clawson worked for Mountain Coal, 1997 is the most representative year on which to base his projected earnings had he not been fired. Defendants also raise the issue of the fire at the mine. It is undisputed that there was a fire at the mine in 2000. It is also undisputed that no one was laid off. However, there was little, if any, evidence presented on the effect the fire had on overtime for regular employees. "[U]ncertainty in determining what an employee would have earned but for discrimination

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should be resolved against the employer." Metz, 39 F.3d at 1494. Therefore, any uncertainty in whether overtime would be reduced, or by how much, should be resolved against defendants. 4. Darnell Is Not Credible, And His Calculations Should Not Be Used

Darnell testified himself, on cross-examination, that there were flaws in his methodology. The flaws were based on the limited information provided by defense counsel, and on the instruction of defense counsel. Based on these flaws, which grossly understate Clawson's losses, Darnell's testimony is not credible. Darnell's report should not be accepted into evidence by the court. MSK Civ. Practice Standard IV.D.2. states that the report may be offered or testimony may be offered. Plaintiffs offered the report, with testimony limited to explaining what was shown in the report where it was shown, without elaboration or conclusions. Defendants chose to present testimony. Defendants should not now be allowed to present both. The Court should strike or exclude Darnell's report. Finally, the losses Darnell testified to at trial are unreasonably low considering Clawson was earning between $47,000 and $78,000 a year at Mountain Coal. Defendants' conclusions in regard to Clawson's damages should be disregarded by the court. All of them are based on faulty reasoning, or misstatements of the evidence, as shown above. The jury was the best judge of credibility, and its conclusions should be adopted by the court. C. Defendants' Analysis In Regard To Dillon Is Fatally Flawed 1. There Is Evidence Supporting Pay Increases To Miner I

Defendants again engage in speculation upon what the jury may have based its award. See Goico, 358 F.Supp. 2d. at 1033. As explained more fully below, this may be particularly problematic in regard to Dillon. It is sheer speculation that the jury cut off Dillon's damages as of 2002 because of his job at Oxbow. However, Brennan did testify and calculate damages 16

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based upon Dillon advancing from Miner III to Miner I. Considering the credibility of plaintiffs' witnesses, it is likely the jury based its calculations on the conclusion he would so advance. Defendants grossly misstate plaintiffs' argument in regard to the accommodation of Dillon. Plaintiffs argued that Dillon was not required to advance from Miner III to Miner I, but could have so advanced, even with his limitation. The evidence was that an individual could advance while performing one job. Thus Bartlett was able to advance while doing the belt mechanic job, and Clawson was able to advance while doing the materials handler job. Tweddell testified that it was possible to advance from Miner III to Miner I while just doing the lube man job. Dillon argued he could be accommodated at his position as lube man, which was available. Dillon also testified he could be accommodated as a fuel hauler. However, neither position would prevent him from advancing later. Dillon had a fifty-pound lifting restriction similar to Rolf's lifting restrictions of fifty pounds, not repetitive. Rolf testified to many jobs he could do with his restrictions. Olsen testified that a person could do any job at the mine with a fifty-pound restriction. Many people testified to the help available for lifting, and help lifting would be a reasonable accommodation. Finally, Dillon could do the essential functions of miner and mechanic, with or without accommodation, as described in admitted exhibits 88 and 90. Thus, there is an abundance of evidence supporting pay at the rate of Miner I for Dillon. 2. Defendants' Claims Of An Excess Award Are Speculative

Defendants first claim that Brennan was unjustified in increasing the starting figure for Dillon to $49,266. They speculate that he did this to soften the blow to Dillon due to the mitigation issue, although Brennan denied this at trial. Defendants allege that because he did this, the jury's damage award must be too high. There are several flaws in this logic. Foremost, it depends on defendants' earlier speculation that the jury reached its figure by accepting 17

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Brennan's calculations, but cutting off damages at 2002. However, the jury instead may have figured that Brennan should not have increased the starting amount and reduced the damages accordingly. Subtracting Brennan's original amount of $41,600 from his final amount of $49,266 leaves $7,666. Dillon had five full years of losses. 7,666 multiplied by 5 equals 38,330. Brennan's report shows that Dillon lost $146,830. Taking $38,330 out of $146,830 leaves $108,500. Rounding this down give us the jury's award to Dillon of $108,000. The jury might round down to account for the two partial years. It may also have decided Brennan never should have increased the amount and so erred on the side of caution in rounding down. This explanation for the jury's conduct is as likely as defendants' explanation. Furthermore, Brennan gave good reasons for deciding that $49,266 was an appropriate starting amount. According to defendants' footnote 17, $41600 was calculated by multiplying Dillon's base pay of $20.00 per hour by 2080 hours per year. Thus, the original figure did not account for overtime, and thus a higher number would be appropriate. The addition of $7,666 in over time pay, resulting in the $49,266, would be exceedingly low based on the testimony presented at trial. Because of the twelve hour rotating shifts, it was normal for Mountain Coal employees to accumulate overtime. Dillon testified at trial that he worked all the overtime he could get to support his family. Finally, in regard to the fire at the mine, defendants presented little if any evidence as to how it would have effected these plaintiffs' overtime amounts. As stated above in regard to Clawson, such uncertainty must be resolved against the employer. Finally, the court should not accept exhibit 724 into evidence. Once again, defendants are attempting to shore up their failed trial strategy by asking the court to accept evidence they did

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not present at trial. Defendants had a full and fair chance to litigate the issue, and should not be allowed to submit new evidence. 3. Darnell Is Not Credible, And Brennan's Calculations Should Be Used

First, the court should not accept Darnell's report on Dillon into evidence. The report should be excluded or stricken, and not considered by the court. This is for the same reasons the court should not admit the report of Darnell in regard to Clawson. As explained above, it is sheer speculation that the jury cut off Dillon's damages as of 2002. Plaintiffs have already explained the evidence showing that Dillon would have advanced from Miner III to Miner I if he had not been discriminated against by the defendants. Darnell's reports are flawed because they do not consider fringe benefits or overtime, and understate each plaintiffs' damages, as explained above regarding Clawson. Darnell relied on information and instructions from defense counsel instead of using the methods he knew to be more accurate. Finally, it is interesting to note that defendants' conclusion does not encourage the court to use Darnell's figures of $107,172 or $174,978 for Dillon's back pay losses. In any event, the jury's verdict is well supported by the evidence, as presented by Brennan and other witnesses. Therefore, the court should adopt the jury's verdict as the proper back pay award for each plaintiff. III. THE COURT SHOULD NOT DEDUCT COLLATERAL SOURCE BENEFITS FROM CLAWSON'S BACK PAY AWARD BECAUSE IT WILL LEAVE DEFENDANTS LESS THAN FULLY RESPONSIBLE FOR THEIR ACTIONS A. Background On The Collateral Source Rule

Defendants correctly recognize the dual purpose of economic damages to make whole and deter, but misapply both concepts in regard to collateral sources. Defendants claim, again on their own ipse dixit, that deterrence will still be served by subtracting collateral sources, while 19

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simultaneously chanting the mantra of the double recovery that they allege. Defendants misunderstand the collateral source doctrine, have not shown that there would be a double recovery, and make illogical arguments regarding deterrence. "The collateral source rule . . . focuses on what the tortfeasor and collateral source should pay, not on what plaintiff should receive." EEOC v. O'Grady, 857 F.2d 383, 390 (7th Cir. 1988) citing Craig v. Y & Y Snacks, Inc., 721 F.2d 77, 83 (3rd Cir. 1983). "The collateral source rule allows plaintiff to seek full recovery from a tortfeasor even though an independent source has compensated the plaintiff in full or in part for the loss . . . public policy favors giving the plaintiff a double recovery rather than allowing a wrongdoer to enjoy a reduced liability simply because plaintiff has received compensation from an independent source." Green v. Denver & Rio Grande R.R., 59 F.3d 1029, 1032 (10th Cir. 1995). Despite this clear policy, defendant focus solely on what Clawson should receive.2 As deterrence is one of the key purposes of damages under the ADA, it is important that defendants be held completely responsible for their actions. This is especially true when the collateral source payments were a result of the prediscrimination earnings of the plaintiffs. Defendants cite EEOC v. Sandia Corp. without really understanding its significance. 639 F.2d 600, 624-626 (10th Cir. 1980). In Sandia the court held that unemployment payments need not be deducted from back pay. Sandia, 639 F.2d at 624-26. Although it technically left the decision to the discretion of the trial court, the Tenth Circuit stated that unemployment was "peculiarly the property of the claimant" and that deducting it would result in a "windfall" to the defendant. Id. at 625-26. Additionally, the Sandia court held that employee benefits that were earned, like vacation time, should not be deducted from back pay. Id. at 626. While the
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Defendants have not requested that any collateral source be deducted from Dillon's economic damages. Defendants have therefore waived any such arguments, and plaintiffs will limit their arguments to Clawson.

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defendant in Sandia did not raise the issue of paying unemployment taxes, the defendant in Gullet Gin did raise the issue. The Supreme Court stated that the benefits were collateral regardless of the employer's payments, and refusing to deduct them did not result in the employees being made more than whole. NLRB v. Gullet Gin Co., 340 U.S. 361, 364-65 (1951). While the Tenth Circuit did affirm a deduction based on unemployment in Wyoming Retirement, it did so in large part because the state was a party. EEOC v. Wyoming Retirement Sys., 771 F.2d 1425, 1431-32 (10th Cir. 1985). The court distinguished cases solely between private parties, such as Craig v. Y & Y, because tax dollars were at stake. Id. This is a case between private parties, and there is no public policy reason for not deducting benefits. Defendants' argument that they paid for, or contributed to, the benefit is also unavailing. The argument was obviously rejected by the Supreme Court in Gullet Gin. Additionally, the Sandia court rejected the argument in regard to vacation pay, because the employee had earned it. The Seventh Circuit stated that benefits provided by the employer, but which the plaintiffs have earned, should not be offset from back pay. O'Grady, 857 F.2d at 391. In this case disability benefits were clearly earned by the plaintiffs. Defendants' arguments to the contrary are illogical and ignore economic reality. Employers do not provide benefits as a gratuity. The employee receives them as part of a compensation package, which they measure against similar packages with different mixes of pay and benefits. Although the benefits start on the first day, so does the employees pay. There is no difference between the earning of benefits on the first day, and the employee taking his first days wages and buying insurance for himself. Defendants should not get the benefit of what Clawson had already earned.

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B.

Defendants Allege Double Recovery, Without Demonstrating It

However, even with their focus on Clawson, defendants have not shown that he would receive a double recovery. Quite frequently benefits programs, whether public benefits or insurance, have to be paid back if a recipient is compensated in another way. EEOC v. Sandia Corp., 639 F.2d 600, 624 fn 8 (10th Cir. 1980); Van Waters & Rogers. Inc. v. Keelan, 840 P.2d 1070, 1080-81 (Colo. 1992) (Rovira Concur); Craig, 721 F.2d at 83-84. It is not at all clear whether Clawson will have to pay back none, some, or all of the collateral benefits he received. However, that is between him and the entity paying the benefits, and does not involve the defendants.3 "[W]hether to save or recapture those costs is properly an issue between the

provider of the benefits and its beneficiaries, a policy choice in the design of the program. Absence of a recoupment provision does not help the employer who causes the costs by improperly terminating the employee's regular source of compensation." Seibel v. Liberty Homes, Inc., 752 P.2d 291, 295 (Ore. 1988). Finally, this is not a decision being made between parties in morally equal positions. Defendants violated Clawson's federally protected rights. Defendants are the wrongdoers in this case. It is defendants' actions that harmed Clawson and made the lawsuit necessary. If one party must receive a windfall, either Clawson by receiving more than full recovery or defendants by paying less than full damages, it is obvious that party who was wronged should receive it, not the wrongdoer. See Van Waters & Rogers, 840 P.2d at 1074. "There is no reason why the benefit should be shifted to the defendant, thereby depriving the plaintiff of the benefit it confers." Craig, 721 F.2d at 84. It is not clear that Clawson will receive a double recovery. If he

In regard to STD benefits, the defendants are involved because they made the STD payments. However, whether Clawson would have to pay back the STD benefits he received is a question governed by a separate law, and should not be resolved under the ADA.

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has to pay back the benefits, then there is no double recovery. If collateral sources are subtracted, and Clawson has to bay back the benefits, he will be made less than whole. Finally, if either party is to receive a windfall, it should be plaintiff as the innocent party rather than defendants as the wrongdoers. C. Collateral Sources Should Not Be Deducted From Back Pay Because It Will Reduce The Deterrent Effect Of Such Awards

One of the key policies of back pay awards is to serve to deter violations of the ADA and eliminate discrimination. This was not described by the Supreme Court as a lesser goal than making the plaintiff whole, and it is perhaps the more important goal because it effects the public as a whole. Defendants assert that the reduced damages will still serve as a deterrent. Will it serve as a deterrent to future violations by Mountain Coal, AWR, and Arch Coal? It is hard to take defendants' assertions seriously when they have yet to admit wrongdoing, let alone assert they will change their ways. The Supreme Court noted that it was money damages that served as the "spur or catalyst" that makes employers examine their policies and change them to comply with the law. Albemarle Paper Co. v. Moody, 422 U.S. 405, 417-18 (1975). If defendants are allowed to substitute payments from third parties for their own liability, it reduces the deterrent effect of the damages award. Craig, 721 F.2d at 84. The Tenth Circuit explained that it results in a "windfall" or "unjust enrichment" for the employer, because the employer is allowed to substitute a third party's payments for its own back pay liability. Sandia, 639 F.2d at 626. Although Sandia applied to unemployment and vacation, the same is true of disability insurance. Deducting short term or long term disability will allow the defendants to substitute benefits Clawson had earned for their own liability. Essentially Clawson's earnings, his own hard work, will be paying off the defendants' back pay liability. If the employer is not

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held fully responsible, then "it will be `less costly for the employer to wrongfully terminate a protected employee.'" Moysis v. DTG Datanet, 278 F.3d 819, 828 (8th Cir. 2002). If the employer is not fully responsible for its wrong, it clearly has a reduced incentive to comply with the law. Thus, deducting collateral sources reduces the deterrent effect of damages. Id. Defendants assert that the deterrent effect should be given through compensatory, or noneconomic, damages. This misses the mark in several respects. Compensatory damages also serve a make whole function, because they compensate the plaintiff for the very real suffering that occurs as a result of discrimination. Defendants' cite the congressional record as stating that a purpose of compensatory damages is "to provide more effective deterrence." It is clear that this is meant to be more effective deterrence in combination with existing damages. Compensatory damages provide greater deterrence because they increase the monetary exposure of defendants, creating a greater "spur or catalyst." This interpretation is shown in the congressional findings accompanying the passage of section 1981a. "[L]egislation is necessary to provide additional protection against unlawful discrimination in employment." 102 P.L. 166; 105 Stat. 1071 Sec. 2(3) (emphasis added). "Additional remedies under Federal law are needed to deter unlawful harassment and intentional discrimination in the workplace . . ." 102 P.L. 166; 105 Stat. 1071 Sec. 2(1). It is clear that Congress felt that an additional "spur" was needed to get employers moving in the right direction. Congresses purpose should not be sidetracked by reducing the incentive for employers to eliminate discrimination. Further, defendants' argument about compensatory damages serving a deterrent effect rings hollow when defendants are trying to have such damages reduced. This is more than simple application, or misapplication, of the damages cap. Defendants' footnote 1 indicates they will attempt to have the damages reduced further by a later motion. The simple fact is that 24

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defendants do not want to be deterred from their conduct, and do not want to change their policies. They are looking for a way to reduce the sting of losing so that they can afford to continue their discriminatory practices. The court should not allow them the opportunity. Plaintiffs have made arguments about the specific collateral sources in other motions, including plaintiffs' Motion In Limine To Exclude Evidence of Amounts Received From Collateral Sources (3/18/05) and Reply (4/14/05) thereon, and Plaintiffs' Motion for Back Pay and Interest (5/11/06). Rather than repeat those arguments, plaintiffs incorporate them by reference here. Plaintiffs have touched on all of the policy reasons for not deducting any of the collateral sources above, and request that the court deny defendants' motion to deduct these benefits that Clawson has earned. CONCLUSION The defendants have failed to prove by a preponderance of the evidence that they have fewer than 501 employees. The only evidence they submitted is inadmissible. Even if it were, the weight of the evidence shows they do not have fewer than 501 employees. Defendants have not shown a good reason for the court to deviate from the jury's back pay award. Their arguments misstate the evidence, involve speculation, and depend on a complete rejection of the jury's credibility determinations. The court should reject defendants' arguments and adopt the jury's back pay findings. The court should not deduct collateral sources from Clawson's damages. Defendants are trying to escape full responsibility for their actions. There is insufficient evidence to determine that Clawson would receive a double recovery even without such a reduction. Even if Clawson does receive a double recovery it is better that the innocent party receive a windfall than the wrongdoer.

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REQUEST TO ACCEPT OVERSIZE RESPONSE Defendants' motion exceeds the fifteen-page limit set forth in MSK Civ. Practice Standards V.A. Defendants' motion was 28 pages long. Plaintiffs' response is 26 pages long. Plaintiffs were required to exceed the page limit in order to address all of defendants' arguments. Plaintiffs request that if the court accepts defendants' oversize motion, that the court also accept this oversize response. RESPECTFULLY SUBMITTED this 5th day of June, 2006.

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

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UNITED STATES DISTRICT COURT FOR THE DISTRIT OF COLORADO CERTIFICATE OF SERVICE (CM/ECF) I hereby certify that on June 5, 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 email 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]

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