Bonnie Marcus v. Pq Corp

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 11-2009
No. 11-2066
____________
BONNIE MARCUS; ROMAN WYPART;
ERNEST SENDEROV; MARY ELLEN CALLAGHAN
v.
PQ CORPORATION,
Appellant in 11-2009
BONNIE MARCUS; ROMAN WYPART;
ERNEST SENDEROV; MARY ELLEN CALLAGHAN,
v.
PQ CORPORATION,
Bonnie Marcus,
Roman Wypart,
Appellants in 11-2066
____________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 2-07-cv-02075)
District Judge: Honorable John P. Fullam
____________
Argued December 6, 2011
Before: HARDIMAN, BARRY, and VAN ANTWERPEN, Circuit Judges.
(Filed: January 19, 2012)
Scott B. Goldshaw [Argued]
Katie R. Eyer
Salmanson Goldshaw
1500 John F. Kennedy Boulevard
Two Penn Center, Suite 1230
Philadelphia, PA 19102-0000
Attorneys for Plaintiff-Appellee, Bonnie Marcus
Attorneys for Plaintiff-Non-Participating, Mary Ellen Callaghan, and
Ernest Senderov
Attorneys for Plaintiff-Appellee, Roman Wypart
Peter J. Ennis
Buchanan Ingersoll & Rooney
301 Grant Street
One Oxford Centre, 20th Floor
Pittsburgh, PA 15219-0000
Elizabeth A. Malloy [Argued]
Buchanan Ingersoll & Rooney
50 South 16th Street
Two Liberty Place, Suite 3200
Philadelphia, PA 19102-2555
Attorneys for Defendant-Appellant
James M. Tucker
Equal Employment Opportunity Commission
5NW10P
131 M Street, N.E.
Washington, DC 20507
Attorneys for Not Party-Amicus Appellee, EEOC
____________
OPINION OF THE COURT
____________
HARDIMAN, Circuit Judge.
Bonnie Marcus and Roman Wypart (collectively, Plaintiffs) sued their former
employer, PQ Corporation (PQ), for violating the Age Discrimination in Employment
Act (ADEA) of 1967, 29 U.S.C. §§ 621–634. A jury ruled in Plaintiffs‟ favor, awarding
2
substantial damages that were remitted by the District Court. PQ appeals the judgment,
claiming it is entitled to either judgment as a matter of law or a new trial. Plaintiffs filed
a cross-appeal challenging the District Court‟s denial of their post-verdict motion to mold
the judgment to incorporate prejudgment interest and to account for negative tax
consequences.
I
Because we write for the parties, who are well acquainted with the case, we recite
only the essential facts and procedural history.
A
Plaintiffs worked for PQ, a chemicals company, when it was purchased in
February 2005. Following the acquisition, new CEO Mike Boyce implemented a
reduction in force (RIF) with the help of several PQ managers, including John Lau,
Michael Imbriani, Rosalyn Kutchins, and Colleen DelMonte. Lau was Marcus‟s boss,
who was in turn Wypart‟s supervisor. Thirty employees were laid off in May 2005, eight
of whom (including Plaintiffs) worked in the Research and Development Department
(R&D). The Corporate Development Program (CDP) funded certain projects in R&D.
B
Plaintiffs and two other former employees sued PQ for age discrimination under
the ADEA and state law. Because the first jury could not agree on a verdict as to
Plaintiffs, the case was tried a second time. After a seven-day trial, the jury returned a
verdict in their favor, awarding Marcus $1,335,806 in lost wages and $1,500,000 in
3
emotional distress damages, and awarding Wypart $566,636 in lost wages and
$2,000,000 for his emotional distress. The District Court entered a corresponding
judgment.
Plaintiffs moved to amend the judgment to include liquidated damages and later to
mold the verdict to include prejudgment interest and to account for negative tax
consequences. PQ moved for judgment as a matter of law, a new trial, or remittitur. The
District Court granted Plaintiffs‟ motion to amend, denied their motion to mold, and
granted in part and denied in part PQ‟s motion. Specifically, the District Court found that
the emotional distress damages “shock[] the conscience,” and offered a remittitur of
$50,000 to Marcus and $100,000 to Wypart, but it denied the motion in all other respects.
Plaintiffs accepted the remittitur and the parties timely filed notices of appeal.1
II
PQ challenges the jury instructions, the sufficiency of the evidence, and the
impartiality of the jury. “We review the District Court‟s refusal to give specific jury
instructions for abuse of discretion, but exercise plenary review over whether the District
Court gave a correct statement of law in its jury instructions.”2 United States v.
1
The District Court had jurisdiction over the ADEA claim under 28 U.S.C. § 1331and over the state-law claim pursuant to 28 U.S.C. § 1367. We have jurisdiction under
28 U.S.C. § 1291.
2
Plaintiffs claim most of the jury instructions are reviewable only for plain error
because PQ did not object to them. Because the District Court deviated from Federal
Rule of Civil Procedure 51, we are not persuaded that such limited review would be
4
Friedman, 658 F.3d 342, 352 (3d Cir. 2011) (citing United States v. Jimenez, 513 F.3d
62, 74 (3d Cir. 2008)). We scrutinize the denial of a motion for judgment as a matter of
law de novo, viewing the evidence in the light most favorable to the prevailing party.
McKenna v. City of Phila., 649 F.3d 171, 176 (3d Cir. 2011). Finally, we review for
abuse of discretion the decision not to grant a new trial requested because of jury passion
and prejudice. Evans v. Port Auth., 273 F.3d 346, 351–52 (3d Cir. 2001).
A
In examining any jury instruction, “[w]e must determine whether, taken as a
whole, the instruction properly apprised the jury of the issues and the applicable law.”
Donlin v. Philips Lighting N. Am. Corp., 581 F.3d 73, 78 (3d Cir. 2009) (citing Dressler
v. Busch Entm’t Corp., 143 F.3d 778, 780 (3d Cir. 1998)). “[A] mistake in a jury
instruction constitutes reversible error only if it fails to „fairly and adequately‟ present the
issues in the case without confusing or misleading the jury.” Id. at 79 (quoting United
States v. Ellis, 156 F.3d 493, 498 n.7 (3d Cir. 1998)). “The trial judge is permitted
considerable latitude to summarize and comment upon the evidence, provided that the
jury is neither confused nor misled.” Id. (citing Am. Home Assurance Co. v. Sunshine
Supermarket, Inc., 753 F.2d 321, 327 (3d Cir. 1985)).
appropriate. In any event, the distinction is immaterial because PQ‟s arguments all fail
under the more liberal plenary standard.
5
PQ first asserts that the jury instructions did not accurately convey the “but-for”
causation requirement of the ADEA as set forth in Gross v. FBL Financial Services, Inc.,
129 S. Ct. 2343 (2009). In Gross, the Supreme Court held that
a plaintiff bringing a disparate-treatment claim pursuant to the ADEA must
prove, by a preponderance of the evidence, that age was the “but-for” cause
of the challenged adverse employment action. The burden of persuasion
does not shift to the employer to show that it would have taken the action
regardless of age, even when a plaintiff has produced some evidence that
age was one motivating factor in that decision.
129 S. Ct. at 2352.
The jury instructions at issue on appeal undoubtedly captured this burden. The
District Court‟s instructions mentioned “but-for” or “because of” no fewer than four
times. At other points in the instructions, the District Court properly explained that age
must have been a “decisive” or “determinative” factor in the decision to terminate
Plaintiffs, verbiage that expresses but-for causation. Additionally, the verdict slip asked
the jury whether “age was a „but for‟ cause of PQ‟s decision.” While some language in
the instructions, read in isolation, strayed from the stringent but-for standard, we will not
reverse unless the instructions as a whole fail to correctly state the burden of proof. Read
together, these instructions were not deficient.
Next, PQ contends that following the Supreme Court‟s decisions in Gross and
Staub v. Proctor Hospital, 131 S. Ct. 1186 (2011), the District Court should not have
6
delivered a “cat‟s paw”3 instruction in an ADEA case.4 Before Staub, we allowed a
plaintiff to pursue an ADEA claim under a cat‟s paw theory. Abrams v. Lightolier Inc.,
50 F.3d 1204, 1214 (3d Cir. 1995); see Abramson v. William Paterson Coll. of N.J., 260
F.3d 265, 285–86 (3d Cir. 2001) (citing Abrams, 50 F.3d at 1214) (“Under our case law,
it is sufficient if those exhibiting discriminatory animus influenced or participated in the
decision to terminate.”). Staub has not disturbed that precedent.
In Staub, the plaintiff sued his former employer under the Uniformed Services
Employment and Reemployment Rights Act (USERRA) of 1994, 38 U.S.C. §§ 4301–
4335, on a cat‟s paw theory. The Supreme Court evaluated the theory with traditional
tort-law concepts of proximate cause, observing that “the ultimate decisionmaker‟s
exercise of judgment [does not] automatically render[] the link to the supervisor‟s bias
„remote‟ or „purely contingent.‟ The decisionmaker‟s exercise of judgment is also a
proximate cause of the employment decision, but it is common for injuries to have
multiple proximate causes.” 131 S. Ct. at 1192 (citing Sosa v. Alvarez-Machain, 542
U.S. 692, 704 (2004)). The Court held: “[I]f a supervisor performs an act motivated by
3
A “cat‟s paw” or “subordinate bias” theory of liability is “one in which [the
plaintiff seeks] to hold his employer liable for the animus of a nondecisionmaker.”
McKenna, 649 F.3d at 177–78 & n.6; accord Staub, 131 S. Ct. at 1190 & n.1.
4
Plaintiffs dispute whether the cat‟s paw instruction was given. We think it was.
Following a sidebar during the jury instructions in which Plaintiffs‟ counsel requested a
cat‟s paw instruction, the Court told the jury: “[I]f you conclude that an employee who‟s
had a role in the final decision to terminate the plaintiffs, was shown to have been
inclined to discriminate on the basis of age, that would be an important factor to
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antimilitary animus that is intended by the supervisor to cause an adverse employment
action, and if that act is a proximate cause of the ultimate employment action, then the
employer is liable under USERRA.” Id. at 1194 (footnote omitted).
We do not understand Staub to bar the application of a cat‟s paw theory in an
ADEA case. Although USERRA imposes a more lenient causation requirement than
does the ADEA,5 Staub is a case about proximate cause as it relates to principles of
agency and vicarious liability. To have a viable claim under either statute using a cat‟s
paw theory, a plaintiff must surmount both the causation and vicarious liability hurdles.
This will be more difficult in an ADEA case than in a case arising under USERRA or
Title VII, but that is because of Gross, not Staub. Simply put, “the underlying principles
of agency upon which subordinate bias theories are based apply equally to all types of
employment discrimination.” Simmons v. Sykes Enters., Inc., 647 F.3d 943, 949–50
(10th Cir. 2011) (noting that an ADEA plaintiff may rely on a subordinate bias theory
after Staub). Given that Plaintiffs argued to the jury that DelMonte, Kutchins, and
Imbriani took actions to induce Boyce to terminate them, the cat‟s paw instruction was
proper.
consider.” Given the evidence presented, we believe the jury would have understood this
instruction to empower it to hold PQ liable on a theory of subordinate bias.
5
“Unlike Title VII and the USERRA, „the ADEA‟s text does not provide that a
plaintiff may establish discrimination by showing that age was simply a motivating
factor,‟ the operative phrase relied upon in Staub.” Simmons v. Sykes Enters., Inc., 647
F.3d 943, 949 (10th Cir. 2011) (quoting Gross, 129 S. Ct. at 2349).
8
PQ also asserts that the District Court should have given a business-judgment
instruction. We find this argument unpersuasive because the District Court twice told the
jury that PQ had the legal right to make certain business decisions. In particular, the
District Court instructed that it was “perfectly legal for an employer . . . to decide to
shake up the personnel” and that “the defendant had a right to hire and fire its employees
whenever they [sic] wanted to, as long as they [sic] didn‟t do it because of age.” This
language sufficed to inform the jury that it could not hold PQ liable simply because it
disagreed with PQ‟s decision to fire Plaintiffs, which is the essence of any business-
judgment charge. PQ was not entitled to any particular language, so long as the
instruction correctly described the law, and it did so here.
Finally, PQ takes issue with the impartiality of the District Court. Having
reviewed the instructions and PQ‟s various objections, we find that none were unduly
prejudicial. District courts have substantial latitude to comment on the evidence to assist
the jury. Here, none of the District Court‟s statements undermined the jury‟s duty to
weigh the evidence. See United States v. Olgin, 745 F.2d 263, 268–69 (3d Cir. 1984)
(discussing the factors that inform whether a charging remark is unduly influential).
For the reasons stated, PQ‟s challenges to the jury instructions are without merit.
B
PQ next contends that the District Court erred in denying its motion for judgment
as a matter of law. We are unpersuaded because Plaintiffs introduced considerable
evidence from which the jury could infer discrimination. See Smith v. City of Allentown,
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589 F.3d 684, 689–91 (3d Cir. 2009) (describing the burden-shifting framework of an
ADEA claim). For example, Plaintiffs showed how PQ‟s proffered reason for the
terminations changed over time. They also introduced evidence that, of the employees
who held the same title as Plaintiffs, all of those fifty-five and older were fired in the RIF
while all of those under fifty-five were retained. They proffered expert testimony that
this pattern was statistically significant, even when controlling for PQ‟s business
explanations. Moreover, Marcus testified that Lau told her before the RIF that older
employees would be its focus. Finally, Plaintiffs presented circumstantial evidence of
ageism at PQ in the form of verbal comments made by Kutchins and Imbriani.
Although PQ is correct that the jury could have devalued this evidence in favor of
PQ‟s nondiscriminatory justification, the jury was not required to do so. The evidence
presented was more than sufficient to support an inference of age discrimination, and the
motion for judgment as a matter of law was appropriately denied.
C
PQ‟s final argument on appeal is that the jury made a substantial award of
emotional distress damages in the absence of serious harm. According to PQ, this shows
that the jury acted out of passion and prejudice, which would entitle it to a new trial.
“A new trial is warranted based „upon [a] showing that the jury verdict resulted
from passion or prejudice.‟” Evans, 273 F.3d at 352 (alteration in original) (quoting
Hurley v. Atl. City Police Dep’t, 174 F.3d 95, 114 (3d Cir. 1999)) (internal quotation
marks omitted). However, the “size of the award alone [is not] enough to prove prejudice
10
and passion.” Id. (alteration in original) (internal quotation marks omitted). If the award
is excessive, but did not result from passion or prejudice, remittitur (like the one granted
here) is the proper remedy. See Hurley, 174 F.3d at 114.6
PQ argues that in addition to the size of the award, the errors in the jury
instructions and the fact that the jury deliberated for less than three hours prove passion
and prejudice. The first contention is unpersuasive because the instructions were not
erroneous. See Evans, 273 F.3d at 352 (“Because we have rejected the allegations of
error upon which the Port Authority bases its impartiality argument, we reject as well the
Port Authority‟s argument that the alleged errors tainted the jury‟s verdict.”). Nor does
the length of the deliberation here show passion and prejudice. Three hours was not
insufficient for the jury to reach a reasoned decision. See Paoletto v. Beech Aircraft
Corp., 464 F.2d 976, 983 (3d Cir. 1972) (“[T]he brevity with which a jury reaches its
verdict does not, standing alone, substantiate a claim of capriciousness, even where the
total time of deliberation is substantially less than the [40 minutes the] jury required in
this case.”); see also Wilburn v. Eastman Kodak Co., 180 F.3d 475, 476 (2d Cir. 1999)
(per curiam) (“A jury is not required to deliberate for any set length of time. Brief
deliberation, by itself, does not show that the jury failed to give full, conscientious or
impartial consideration to the evidence.”).
6
PQ asks us to distinguish the present case because the jury‟s award is
compensatory, and not punitive like the award in Hurley. Evans forecloses this
distinction because that case involved a compensatory award and applied the same rule
nonetheless. See 273 F.3d at 351–52.
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For the reasons stated, we reject PQ‟s claims of error.
III
Plaintiffs‟ cross-appeal presents two issues, both of which relate to the District
Court‟s refusal to mold the verdict. We review the District Court‟s denial of prejudgment
interest and refusal to modify the verdict to reflect tax consequences for abuse of
discretion. Pignataro v. Port Auth., 593 F.3d 265, 273 (3d Cir. 2010) (citing Thabault v.
Chait, 541 F.3d 512, 533 (3d Cir. 2008)) (prejudgment interest); Eshelman v. Agere Sys.,
Inc., 554 F.3d 426, 443 (3d Cir. 2009) (tax consequences).
“„[I]n the absence of an explicit congressional directive, the awarding of
prejudgment interest under federal law is committed to the trial court‟s discretion‟ and
should be awarded based on considerations of fairness.” Pignataro, 593 F.3d at 273–74
(alteration in original) (quoting Brock v. Richardson, 812 F.2d 121, 126 (3d Cir. 1987)).
Because they usually serve to make a plaintiff whole, we “favor[] permitting prejudgment
interest awards,” William A. Graham Co. v. Haughey, 646 F.3d 138, 144 (3d Cir. 2011)
(emphasis removed), and therefore generally apply “a strong presumption in favor of
awarding prejudgment interest,” Booker v. Taylor Milk Co., 64 F.3d 860, 868 (3d Cir.
1995). An abuse of discretion occurs when a district court deviates from this policy
without a reasoned explanation. See Pignataro, 593 F.3d at 274 (“If prejudgment interest
is denied, the District Court must explain why the usual equities in favor of such interest
are not applicable.”); Booker, 64 F.3d at 868 (“[A] district court may exercise its
12
discretion to depart from this presumption only when it provides a justification that
reasonably supports the departure.”).
Similar principles inform the tax-consequences analysis:
[A]n award to compensate a prevailing employee for her increased tax
burden as a result of a lump sum award will, in the appropriate case, help to
make a victim whole. This type of an award, as with prejudgment interest,
represents a recognition that the harm to a prevailing employee‟s pecuniary
interest may be broader in scope than just a loss of back pay. Accordingly,
either or both types of equitable relief may be necessary to achieve
complete restoration of the prevailing employee‟s economic status quo and
to assure “the most complete relief possible.”
Eshelman, 554 F.3d at 442 (quoting Local 28 of Sheet Metal Workers’ Int’l Ass’n v.
EEOC, 478 U.S. 421, 465 (1986)). But there is no presumption in favor of an adjustment
for negative tax consequences. Id. at 443 (stating that district courts “should grant relief
„in light of the circumstances peculiar to the case‟” (quoting Albemarle Paper Co. v.
Moody, 422 U.S. 405, 424 (1975))).
The District Court‟s only explanation for the denial of prejudgment interest, in a
single sentence, was that the liquidated damages provision of the ADEA is sufficient to
compensate Plaintiffs. Yet we have held that prejudgment interest may be awarded in an
ADEA case involving a willful violation, reasoning that the punitive award of liquidated
damages serves a different purpose than, and therefore does not preclude, the
compensatory award of prejudgment interest. Starceski v. Westinghouse Elec. Corp., 54
F.3d 1089, 1101–03 (3d Cir. 1995). Thus, although the District Court did not explicitly
hold that it could not award prejudgment interest, it failed to recognize the presumption
13
in favor of prejudgment interest and offer a valid reason for departing from it.
Consequently, the District Court‟s “decision rests upon . . . an errant conclusion of law.”
EEOC v. Kronos Inc., 620 F.3d 287, 296 (3d Cir. 2010) (internal quotation marks
omitted). We reach a similar conclusion with respect to the issue of negative tax
consequences, even though there is no presumption in favor of an adjustment to account
for them, because the District Court did not acknowledge the differing interests in
compensation and punishment.
IV
For the foregoing reasons, we will affirm the District Court‟s March 23, 2011
judgment, we will vacate in part the District Court‟s February 17, 2011 order to the
extent that it denies a modification of the judgment to incorporate prejudgment interest
and to account for negative tax consequences, and we will remand the case so that the
District Court may consider Plaintiffs‟ arguments under the correct legal standard.
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