Free Response to Motion - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 04-cv-01067-REB-CBS WILLIAM R. CADORNA, Plaintiff, v. THE CITY AND COUNTY OF DENVER, a Municipal Corporation, Defendant. RESPONSE IN OPPOSITION TO PLAINTIFF'S MOTION FOR ENTRY OF PARTIAL JUDGMENT FOR BACK PAY AND LIQUIDATED DAMAGES Defendant, City and County of Denver ("Denver"), by the undersigned Assistant City Attorneys, submits this Response to Plaintiff's Motion for Entry of Partial Judgment for Back Pay and Liquidated Damages. INTRODUCTION Plaintiff, William R. Cadorna ("Cadorna") has moved for a partial entry of judgment against Denver in the amounts of $610,571 in back pay and $610,571 in liquidated damages. While Denver submits that no back pay award is appropriate and reserves its right to so argue,1 this response is limited in scope to the issue raised by

Denver intends to file at least one post-judgment motion in the form of a renewed motion for judgment as a matter of law, or in the alternative, a new trial, in which it will present arguments concerning the jury's back pay award. Here, however, it appears that Cadorna's motion for entry of judgment on back pay is simply a pro forma request that the Court enter judgment based on the jury verdicts, and therefore it is premature for Denver to respond substantively as to why such back pay verdicts are in error.
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Cadorna's motion ­ whether liquidated damages should be awarded. As shown below, Cadorna is not entitled to liquidated damages for at least three reasons: (1) Cadorna has waived his right to request liquidated damages; (2) the award for liquidated damages should be denied as the jury's "willfulness" findings as to both claims were not supported by law or the evidence and (3) liquidated damages under the ADEA are punitive in nature and therefore inappropriate to award against municipalities. Because the evidence does not support a finding for liquidated damages, Cadorna is not entitled to entry of judgment in the amount of $1,221,142.2 ARGUMENT I. CADORNA HAS WAIVED HIS RIGHT TO REQUEST LIQUIDATED DAMAGES. Cadorna seeks equitable relief in the form of liquidated damages. Yet in the Final Pretrial Order, Cadorna made no reference to any claim for liquidated damages pay. D.C.COLO.L.CivR 16.3 and Appendix G, also adopted by REB Civ. Practice Standard IV. A. 2, require that in the Final Pretrial order the parties "[s]ummarize the claims" and "[i]dentify the specific relief sought." Notwithstanding this admonition nowhere in the Pretrial Order--not in the summary of claims section or anywhere else--did Cadorna request liquidated damages However, one issue needs explication here. The jury's award of back pay damages of $100,000 for Cadorna's termination and the award of $510,571 for the failure to reinstate is a double recovery as the jury was instructed to award back pay from March 15, 2003 through the date of its verdict and the two awards overlap, and therefore at most the jury's verdict is for $510,571. 2 Denver will be seeking any affirmative relief on these issues from the Court in its postjudgment motion(s) to ensure compliance with D.C.COLO.L.CivR 7.1 (c) which precludes requests for affirmative relief in responsive briefs.
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or even mention liquidated damages. Cadorna was required to set forth the specific relief he sought in this case in the Final Pretrial Order. Pursuant to ¶ 12 of the Final Pretrial Order, the pleadings were deemed merged therein, and so the Final Pretrial Order is dispositive of Cadorna's motion and it should be summarily denied.3 See Calaban v. Vaughn, 760 F.2d 662, 664 - 65 (5th Cir, 1985) (where pretrial order contained no claim for injunctive or declaratory relief, District Court was within its discretion to deny motion to amend to include such claims during or after trial); See also Tyler v. City of Manhattan, 118 F. 3d 1400, 1403 (10th Cir. 1997) (claim for compensatory damages under ADA properly stricken by district court where pretrial order did not allege intentional discrimination but a disparate impact claim); Wilson v. Muckala, 303 F. 3d 1207, 1216 (10th Cir. 2002) (cautioning attorneys to "meticulously examine" the pretrial order because it supersedes the pleadings and establishes the issues); Eads v. Unified Sch. Dist. No. 289, 184 F. Supp. 2d 1122, 1130 (D. Kan. 2002) (burden on the parties not the court "to assure that the pretrial order accurately reflects their respective positions regarding the issues, legal theories, and all other matters included therein). II. THE EVIDENCE AT TRIAL DOES NOT SUPPORT AN AWARD OF LIQUIDATED DAMAGES. Although Denver's decision to terminate Cadorna, and its subsequent refusal to reinstate him apparently were found to be discriminatory by the jury,

Even if Cadorna could reach back to his Second Amended Complaint (which he cannot, because the Final Pretrial Order is controlling), he did not seek front pay in the Complaint, thereby further underscoring that the motion should be denied.
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those decisions cannot form the basis to find that Denver willfully violated the ADEA as there is no evidence of a causal connection between Denver's decisions and Cadorna's age. For example, Cadorna presented no evidence that any other fire fighter who engaged in similar activity was treated any differently than him. Because Cadorna has failed to meet his evidentiary burden on this issue, Cadorna is not entitled to liquidated damages. A. There was no proof that Denver "willfully" violated the ADEA in terminating plaintiff.

The jury found that the City willfully violated the ADEA in terminating Cadorna. A plaintiff who establishes a "willful violation" of the ADEA can be awarded liquidated damages in the amount equal to unpaid damages. See 29 U.S.C. §626 (b). A violation is willful "under the Act if `the employer...knew or showed reckless disregard for the matter of whether its conduct was prohibited by the ADEA." See Smith v. Consolidated Mut. Water Co., 787 F.2d 1441, 1443 (10th Cir. 1986) citing from Trans World Airlines, Inc. v. Thurston, 469 U.S. 111 (1985). There is a high evidentiary threshold for Cadorna to meet in proving that Denver willfully violated ADEA. In Cross v. New York City Transit Authority, 417 F.3d 241, 253 (2d Cir. 2005), the court affirmed a jury's willfulness finding when the evidence showed defendant supervisors engaging in hostile ageist remarks, failed to offer older employees similar training to their younger counterparts, and then demoting the older employees using performance as the excuse to do so. The Second Circuit also upheld a willfulness finding where the employer proffered false and shifting justifications for

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discharge where the termination was "calculated to conceal deliberate discrimination..." See Benjamin v. United Merchs. & Mfrs., Inc., 873 F.2d 41, 44-45 (2d Cir. 1989); Minshall v. McGraw Hill Broad. Co., 323 F3d 1273, 1283 (10th Cir. 2003). (Evidence introduced showing manager instructed by corporate not to hire anyone under 40 to replace over 40 plaintiff was sufficient to show employer knew firing was in violation of ADEA); Furr v. AT&T Tech's., 824 F.2d 1537, 1547 (10th Cir. 1987) (ageist statements support a finding of willfulness). By contrast, an employer's reliance on its retirement policies is not a willful violation of ADEA if the plaintiff cannot show that the defendant should have known that the retirement policies were unjustifiable. See EEOC v. Grady, 857 F.2d 383, 388 (7th Cir. 1988). Further, ageist comments by supervisory staff not responsible for the discharge of the employee, is not enough for a willfulness finding. See Hudson v. Normandy Sch. Dist., 953 F.2d 410, 413 (8th Cir. 1992) (To prove willfulness, the employee "must present evidence of her employer's state of mind at the time her employer violated ADEA" and that the employee must also "prove that the people who decided to fire her knowingly or recklessly violated ADEA") citing from Blake v. J.C. Penny Co., 894 F.2d 274, 280 (8th Cir. 1990); Tolan v. Levi Strauss & Co., 867 F.2d 467, 471 (8th Cir. 1989). The undisputed evidence presented shows that Denver did not subject Cadorna to ageist comments or fabricate an issue with the goal of discharging him from the Denver Fire Department. Instead, the undisputed evidence demonstrates that Denver had an honest good faith belief that Cadorna committed the conduct for which he was

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disciplined, and there was no evidence even hinting that age played a part in the decision. See Trial Ex. No. 15 (A.C. Hart's memorandum to D.C. Kelly Caldwell detailing his findings); Trial Ex. Nos. 12,13,14 (written statements from firefighters Frank Hoffman, Gil Lettig, and Russ Dobson noting their observations on the date of the incident where no mention of plaintiff's age is made); Trial Ex. No. 1 (statement from cashier Kevin McKee where no mention of plaintiff's age is made); Trial Ex. No. 11 (written statement from plaintiff on date of incident where he never alleges that his age is the prime motivation for the investigation); and Trial Ex. Nos. 26 and 27 (the contemplation letter of discipline from the Denver Fire Department and the Order of Disciplinary Action from the Manager of Safety where no mention of the Cadorna's age is found anywhere in these documents). There was no evidence to suggest that either Chief Juniel or Manager Howard lacked an honest good faith belief that Cadorna took the cookbook without obtaining appropriate permission. See Rivera v. City and County of Denver, 365 F.3d 912, 92425 (10th Cir. 2004) ("The relevant inquiry is not whether [the employer's] proffered reasons were wise, fair, or correct, but whether [it] honestly believed those reasons and acted in good faith upon those beliefs"). The fact that Denver acted in good faith on its belief that the Cadorna committed a terminable offense is not the "reckless disregard" of the ADEA required under law for the jury to find willfulness. See EEOC v. Prudential Fed. Sav. Loan., 763 F.2d 1166, 1174 (10th Cir. 1985) citing from Airline Pilots Assoc. v. Trans World Airlines, Inc., 713 F.2d 940, 956 (2d Cir. 1983) ("a violation is not willful when the employee acts `reasonably and in good faith.'")

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Before determining whether Cadorna is entitled to liquidated damages, this Court must first "determine whether the record contains substantial evidence in support of the jury's decision." See Griffin v. Strong, 983 F. 2d 1544, 1546 (10th Cir. 1993). This Court has the authority to set aside, or disregard, the jury's finding of willfulness if there is an insufficient legal basis to support such a finding. See Powell v. Fournet, 846 F. Supp. 1443, 1445 (D. Colo. 1994) ("The Court should disregard any jury determination for which there is no legally sufficient evidentiary basis enabling a reasonable jury to make it."). In this case, there is an insufficient evidentiary basis for the jury to find that Denver acted willfully in terminating Cadorna because the evidence showed that the decision-makers involved in the termination were of comparable age to Cadorna, or older, and that the City acted in good faith on the information that the decision-makers possessed when Cadorna was terminated. Cadorna presented no evidence to prove that Denver acted with reckless disregard of the ADEA, and more importantly that his age played any role in his termination. Because the requisite proof to show willfulness to support a finding of liquidated damages, the Court should deny Cadorna's motion of liquidated damages for back pay on his termination claim. B. There was no proof that Denver "willfully" violated the ADEA in refusing to reinstate Cadorna.

Additionally, there is insufficient evidence to support the verdict of willfulness in Cadorna's failure to reinstate claim. The only evidence presented was the Hearing Officer's decision which relied on state statutes for his refusal to reinstate. (See Trial Ex. No. 63). Basing a decision on state laws unchallenged in these
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proceedings is not evidence of pretext let alone evidence of a reckless disregard of the ADEA. A quasi-judicial decision that relies on controlling state laws is not a reckless disregard of ADEA. See Whitfield v. City of Knoxville, 756 F. 2d 455, 46364 (6th Cir. 1985) (reliance on judicial opinions, even when they constitute a minority view, are reasonable and in good faith). Likewise there is no evidence to support the jury's decision that the Civil Service Commission decision (Exhibit 68) showed a reckless disregard of the ADEA. The Civil Service Commission affirmed the Hearing Officer's findings that Cadorna voluntarily retired thus precluding his reinstatement under the state statute. There is no evidence in this decision to show pretext or reckless disregard of the ADEA. Here there is no evidence that the Hearing Officer's and Commission's decisions were reckless or lacking in good faith. The reliance on controlling state statutes is not evidence of "willfulness" as to Cadorna's failure to reinstate claim. Indeed if an employer, acting in good faith and not recklessly, erroneously believes that the statute permits a particular age based decision, then liquidated damages should not be imposed. Hazen Paper Co. v. Biggins, 507 U.S. 604, 616 (1993) ("If an employer incorrectly but in good faith and nonrecklessly believes that the statute permits a particular age-based decision, then liquidated damages should not be imposed"); Woodhouse v. Magnolia Hospital, 92 F. 3d 248, 256-57 (5th Cir. 1996) ("liquidated damages are not recoverable only if there is evidence that the intentional violation of the ADEA was based on the employer's good-faith, albeit mistaken, belief that the statute allowed an age-based decision").

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Denver's failure to reinstate Cadorna to his former position as a firefighter was based solely on the Hearing Officer's reliance upon controlling state law. Even if the jury found that the hearing officer was mistaken in relying on this state law to preclude reinstatement of the Cadorna to his former position, this mistake is insufficient to support a finding of willfulness necessary to award him liquidated damages for this claim. Additionally, the Hearing Officer in deciding that state law precluded Cadorna's reinstatement accepted an argument of counsel. Just as reliance on an attorney's advice that a policy is lawful constitutes good faith, E.E.O.C. v. Wyoming Retirement Ass'n., 771 F. 2d 1425, 1431 (10th Cir. 1985), the hearing officer's acceptance of a counsel's legal argument is good faith. Because the requisite proof to show willfulness is missing to support a finding of liquidated damages, the Court should deny Cadorna's motion for liquidated damages for back pay on his failure to reinstate claim.4 III. LIQUIDATED DAMAGES UNDER THE ADEA ARE PUNITIVE IN NATURE AND SHOULD NOT BE ASSESSED AGAINST A MUNICIPALITY LIKE DENVER. Because the ADEA's liquidated damages provision is punitive in nature, these damages should not be awarded against municipalities. Municipalities are exempt from punitive damages under 42 U.S.C. §1983, City of Newport v. Fact Concerts, Inc., 453 U.S. 247, 271 (1981), despite the fact that a municipality is a person for purposes of liability under that statute. Monell v. Dep't. of Social Servs., 436 U.S. 658 (1978). A Should the Court enter judgment for liquidated damages, it should exclude from the judgment the amount that the jury's back pay award was compensation for Cadorna's expected pension which should be treated as front pay rather than back pay. Skalka v.
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municipality is exempt from punitive damages because of the destructive nature punitive damages can have on a municipality's treasury and the fact that these damages only punish the taxpayers. See City of Newport v. Fact Concerts, Inc., 453 U.S. 247 at 267. That same logic should apply to the liquidated damages provision of the ADEA and "neither reason nor justice suggests that such retribution should be visited upon the shoulders of blameless unknowing taxpayers." Id. This issue is one of first impression in this circuit. Only two Circuit Courts of Appeals have held that the ADEA liquidated damages provision, while punitive in nature, is appropriately awarded against municipalities. Potence v. Hazelton Area School District, 357 F.3d 366, 372-73 (3rd Cir. 2004); Cross v. New York City Transit Authority, 417 F.3d 241, 254-57 (2d Cir. 2005) (Relying on Potence). While both the Second and Third Circuits held that the liquidated damages under the ADEA are punitive in nature because Congress in passing the ADEA specifically included municipalities in its definition of employer and incorporated the Fair Labor Standards Act (FLSA) damages provisions without exempting municipalities, both courts held that Congress intended to have liquidated damages awarded against municipalities. Just as the United States Supreme Court rejected Congress' intention that ADEA liquidated damages be viewed as compensatory and held them to be punitive in nature, Transworld Airline, Inc. v. Thurston, 469 U.S. 111, 126 (1985), this Court should reject the broad logic that Congress also intended that the liquidated damages be applicable to municipalities even though they are punitive in nature, especially when

Fernold Environmental Restoration Management Corp., 178 F. 3d 414 (6th Cir. 1999).
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under similar discrimination statutes, municipalities are exempted from punitive damages. See Smith v. Department of Human Services, 876 F.2d 832, 835-37 (10th Cir. 1989) (discussing liquidated damages provision of ADEA as punitive in nature). Moreover, as the Court there noted, the original bill that later became the ADEA incorporated §16(a) of the Fair Labor Standards Act imposing criminal liability for a willful violation. That criminal sanction was eliminated from the final bill that became the ADEA because of impediments to investigation, conciliation and enforcement posed by the criminal penalty and replaced it with the double or liquidated damages penalty. Id. at 835-36. Certainly if the ADEA's liquidated damages provision is a proxy for a criminal sanction it stands to reason that it should not be imposed against a municipality who cannot be charged with a crime. The Second and Third Circuits in the Potence and Cross decisions did not consider or analyze the liquidated damages provision as a substitute for a criminal penalty. Because that issue was not argued or was ignored in those decisions, they are not precedent in a later case in which the issue arises. Webster v. Fall, 266 U.S. 507, 511 (1925) ("Questions which merely lurk in the record, neither brought to the attention of the court nor ruled upon, are not to be considered as having been so decided as to constitute precedents."); Thomas v. Texas Dept. of Criminal Justice, 297 F. 3d 361, 370 (5th Cir. 2002) citing Webster (opinion is not binding precedent where it fails to squarely address a question); United Food & Commercial Workers Union v. Albertson's Inc., 207 F. 3d 1193, 1199 (10th Cir. 2000) ("In order for a decision to be given stare decisis effect with respect to a particular issue, that issue must have been actually

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decided by the Court." citing 18 Moore's Federal Practice § 134.04[5]; Qwest Corporation v. New Access Communications, 2004 U.S. Dist. LEXIS 28523 at *27 (D. Colo. March 31, 2004, No. 03-N-1278) (a case is not binding precedent on a point of law where holding is only implicit or assumed in the decision). Because the ADEA liquidated damages provision is akin to punitive damages, and municipalities are not traditionally liable for punitive damages and because the ADEA's liquidated damages provision is stand in for a criminal penalty, Cadorna's motion for liquidated damages should be denied. CONCLUSION The Court should deny Cadorna's motion for entry of partial judgment for liquidated damages. He has waived his right to request such relief by failing to ask for it in the Final Pretrial Order. Additionally, Cadorna has not proved that Denver showed a reckless disregard for whether its conduct violated the ADEA. Denver acted in good faith in both its decisions - to terminate Cadorna and not reinstate him. Finally, because the ADEA's liquidated damages provision is punitive in nature and a proxy for a criminal penalty, it is inappropriate as a matter of law to access such damages against Denver. Dated this 7th day of August, 2006. Respectfully submitted, s/ Christopher M.A. Luian Christopher M.A. Lujan Jack M. Wesoky Assistant City Attorney Denver City Attorney's Office
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201 W. Colfax Ave., Dept. 1108 Denver, CO 80202 Telephone: (720) 913-3100 Facsimile: (720) 913-3182 E-mail: [email protected] Attorneys for Defendant City and County of Denver

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CERTIFICATE OF SERVICE I hereby certify that on this 07th day of August, 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: Mark E. Brennan [email protected] and I hereby certify that I have mailed the document to the following non CM/ECF participants in the manner indicated by the non-participant's name: Interoffice mail to: Manager Alvin LaCabe, Jr. Manager of Safety Department of Safety 1331 Cherokee St. Denver, CO 80204 Chief Larry Trujillo Department of Safety Denver Fire Department 745 W. Colfax Denver, CO 80204

s/ Christopher M.A. Lujan Assistant City Attorney Denver City Attorney's Office Litigation Section 201 West Colfax Ave., Dept. No. 1108 Denver, Colorado 80202 Telephone: (720) 913-3100 Facsimile: (720) 913-3182Email:[email protected]

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