Free Response to Motion - District Court of Colorado - Colorado

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

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 01-cv-02199-MSK-MEH MICHAEL E. CLAWSON and JARED L. DILLON, Plaintiffs, vs. MOUNTAIN COAL COMPANY, L.L.C., ARCH WESTERN RESOURCES, L.L.C., and ARCH COAL, INC., Defendants.

DEFENDANTS' RESPONSE TO PLAINTIFF DILLON'S MOTION FOR FRONT PAY AND INTEREST
Defendants Mountain Coal Company, L.L.C. ("Mountain Coal"), Arch Western Resources, L.L.C. ("Arch Western"), and Arch Coal, Inc. ("Arch Coal"), by their attorneys, Holland & Hart LLP, hereby submit this Response to Plaintiff Dillon's Motion for Front Pay and Interest (Dkt. No. 421). I. INTRODUCTION

In his motion, Dillon argues: (1) that the Court should not order reinstatement, but should award front pay in lieu thereof; (2) that his termination from Oxbow Mining should reduce, but not cut off an award of front pay entirely; and (3) that he should be entitled to a front pay award of $58,039, based upon the calculation by Plaintiff's expert witness, Ron Brennan. Defendants submit that, based upon the governing legal standard in the Tenth Circuit, as well as the evidence presented at trial and the jury's verdict, the Court should decline to award

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front pay to Dillon. In the alternative, if the Court is to consider any award of front pay to Dillon, it should first conduct an evidentiary hearing on the issue. II. A. ARGUMENT

Defendants agree that Plaintiff Dillon should not be reinstated. As an initial matter, Plaintiff Dillon argues that, while reinstatement is the preferred

remedy, it should not be ordered in this case. While Defendants do not agree with the reasons stated by Dillon, they concur that reinstatement is not appropriate in this case. B. Because Dillon failed to mitigate his damages by failing to maintain suitable alternative employment, the Court should decline to award him front pay. Front pay is an equitable remedy intended to compensate for the continuing future effects of discrimination. Hughes v. Regents of the University of Colorado, 967 F.Supp. 431, 434 (D. Colo. 1996). An award of front pay is within the trial court's discretion. Id., citing Carter v. Sedgwick County, 929 F.2d 1501, 1505 (10th Cir. 1991). A plaintiff claiming front pay has the duty to take reasonable steps to mitigate such damages. Id. See also Minshall v. McGraw Hill Broadcasting Co., Inc., 323 F.3d 1273, 1287-88 (10th Cir. 2003) (duty to mitigate is relevant to award of front pay); Dilley v. SuperValu, Inc., 296 F.3d 958, 967-68 (10th Cir. 2002) (mitigation is relevant to determine plaintiff's entitlement to front pay). The duty to mitigate includes the obligation to maintain suitable replacement employment once it has been found. Leidel v. Ameripride Services, Inc., 276 F.Supp. 2d 1138, 1145-46 (D. Kan. 2003), citing Brady v. Thurston Motor Lines, Inc., 753 F.2d 1269, 1277 (4th Cir. 1985). The failure to do so constitutes a failure to mitigate damages, which can lead a court, in its discretion, to decline to award front pay. Id. See also Hughes, 969 F.Supp. at 434-36; Johnson v. Spencer Press of Maine, Inc., 364 F.3d 368, 379-81, 384 (1st Cir. 2004) (termination

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for cause from subsequent employment constituted failure to mitigate, justifying court's denial of front pay). At trial in this case, Dillon conceded that he had obtained substantially equivalent employment at Oxbow Mining, but that his actions had led to his being terminated for cause not once, but twice. Dillon said that he "accepted responsibility" for his actions. Still, he sought to recover what he claimed was a small differential in back pay and benefits between Mountain Coal and Oxbow Mining from 2002 forward, on the assumption that he would have remained employed at Oxbow Mining. See Ex. 721, April 15, 2006 Brennan Report, attached hereto at Tab A. However, in its award of economic (back pay) damages, the jury rejected this argument. Dillon sought $148,000 in back pay, id., but instead, the jury awarded $108,000. As Defendants explained in their Motion for Application of Statutory Damage Cap to Compensatory Damage Awards and for Reduction of Advisory Back Pay Award (Dkt. No. 423), filed May 11, 2006, at page 13, it appears that the jury accepted Brennan's back pay calculation of $146,830, but made an adjustment, cutting off damages as of the end of 2001, on the theory that Dillon fully mitigated his damages once he became employed at Oxbow Mining in February 2002. 1 In effect, the jury found that Dillon had fully mitigated his damages by obtaining comparable employment at Oxbow Mining and that he had failed to mitigate his damages by

It appears that the adjustment was as follows. Brennan calculated lost back pay and benefits through 4/21/06 to be $146,830. See Ex. 721, p. 1, Tab A. Lost earnings for the years 2002-06 were $17,042 and lost fringe benefits for 2002-06 were $21,985, for a total adjustment of $39,027. Id., p. 3. Subtracting $39,027 from $146,830 results in lost earnings and fringe benefits through 2001 of $107,803, which the jury rounded up to $108,000.

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failing to maintain such subsequent employment. Leidel, supra; Hughes, supra; Johnson, supra. Such a finding is fully supported by the evidence ­ indeed, Dillon conceded Defendants' failure to mitigate defense. Under these circumstances, the Court should exercise its discretion and decline to award Dillon any front pay damages. Id. C. In the alternative, if front pay damages are to be awarded to Dillon, the amount sought is excessive and without basis in the record. Dillon seeks $58,039 in front pay damages, based solely upon the Brennan report. Motion, Attachment 1. However, the front pay portion of such report was not admitted into evidence at the trial nor did Brennan testify to any such front pay calculation. Moreover, there are a number of problems with such calculation. Most significantly, the calculation runs through the year 2012, but there is no explanation from Brennan or anyone else why such front pay period is appropriate. 2 For example, Brennan provides no explanation why the front pay period should be an additional six years, rather than three years, nine years, or some other period of time. Nor does the record support a finding that any meaningful difference exists between the wages and benefits at Oxbow Mining as compared with those at Mountain Coal. Certainly, any testimony by Brennan on this point at trial constituted sheer speculation and was not based upon any facts or research.

In fact, this appears to be a carryover from Brennan's first expert report in this case, dated November 7, 2002, Ex. 590 (not offered or admitted at trial), attached hereto as Tab B. It is difficult to understand why Brennan opined that it would take Dillon ten years to get back to the level of earnings and benefits he enjoyed at Mountain Coal, considering that, at the time, Dillon was fully employed at Oxbow Mining and had not yet been terminated for cause from such job. Defendants would also note that Brennan came to the identical ten-year conclusion as to Plaintiffs Clawson and Richards, notwithstanding their different physical restrictions, educational backgrounds, skills, experience, and work histories.

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In sum, no front pay award is merited under the law or facts of this case. However, to the extent the Court is inclined to consider an award of front pay to Dillon, there is an insufficient evidentiary record at the present time to do so. Before the Court can properly consider any front pay award, it should first hold an evidentiary hearing on the issue. At such hearing, it is Plaintiff Dillon's burden to present evidence as to his entitlement to front pay and the amount; Defendants should then have the opportunity to cross-examine Plaintiff's witnesses on the issue. III. CONCLUSION

For all the foregoing reasons, Defendants respectfully submit that the Court should decline to award any front pay to Plaintiff Dillon. In the alternative, if the Court is to consider a front pay award, an evidentiary hearing should be held on the issue. Dated: June 2, 2006. Respectfully submitted,

s/ Jeffrey T. Johnson Jeffrey T. Johnson Monique A. Tuttle HOLLAND & HART LLP 555 Seventeenth Street, Suite 3200 Post Office Box 8749 Denver, Colorado 80201-8749 Phone: (303) 295-8019 Fax: (303) 713-6202 [email protected] [email protected] ATTORNEYS FOR DEFENDANT

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CERTIFICATE OF SERVICE

I hereby certify that on June 2, 2006, I have caused to be electronically filed the foregoing with the Clerk of Court using CM/ECF system which will send notification of such filing to the following e-mail addresses: [email protected] [email protected] I am not aware of any non CM/ECF participants in this matter requiring service by other means.

s/ Jeffrey T. Johnson Jeffrey T. Johnson Monique A. Tuttle HOLLAND & HART LLP 555 Seventeenth Street, Suite 3200 Post Office Box 8749 Denver, Colorado 80201-8749 Phone: (303) 295-8019 Fax: (303) 713-6202 [email protected] [email protected] ATTORNEYS FOR DEFENDANT

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