William Howe v. City of Akron

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 14a0095n.06
No. 12-4262
FILED
Feb 04, 2014
UNITED STATES COURT OF APPEALS
DEBORAH S. HUNT, Clerk
FOR THE SIXTH CIRCUIT
WILLIAM HOWE, ET AL.,
Plaintiffs-Appellants,
v.
ON APPEAL FROM THE UNITED
CITY OF AKRON, STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OHIO
Defendant-Appellee.
/
BEFORE: BOGGS, CLAY, and GILMAN, Circuit Judges.
CLAY, Circuit Judge. Plaintiffs appeal an order sanctioning them, pursuant to 28 U.S.C.
§ 1927, for abuse of the discovery process. An earlier trial resulted in a verdict for Plaintiffs, who
are a group of firefighters who alleged discrimination in the promotions process by the City of
Akron. The district court ordered a new trial on the issue of damages only. After extensive
discovery and motions practice, the district court ordered Plaintiffs to pay Defendant $97,056.18 in
fees for abuse of the discovery process, on the basis of Plaintiffs’ shifting damages theories.
Plaintiffs appeal the sanction order. For the following reasons, we DISMISS this appeal for lack
of jurisdiction.
BACKGROUND
Plaintiffs in this case are a group of firefighters who allege that the City of Akron (“City”)
engaged in discriminatory practices in its promotions process for the positions of lieutenant and
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captain in the Akron Fire Department. On December 23, 2008, a jury returned a verdict for
Plaintiffs. The district court entered judgment in 2010, finding that the 2004 promotional
examination had an adverse impact on twelve white candidates for the rank of captain on the basis
of race, on three African-American candidates for the rank of lieutenant on the basis of race, and on
eleven candidates for the rank of lieutenant based on their age. Howe v. City of Akron, 789 F. Supp.
2d 786, 794 (N.D. Ohio 2010).
Although the jury returned a verdict for Plaintiffs, the district court concluded that the jury
had erred with respect to damages. In April, 2011, the court ordered a new trial on the question of
damages, and scheduled the trial for July, 2011. What followed was a contentious discovery period,
during which the City repeatedly attempted to invoke privilege with respect to its damages
calculations, and Plaintiffs refused to answer questions relating to their promotional exams. The
City completed its depositions of the firefighters by June 18, 2011.
As the case moved closer to trial, the parties filed various motions in limine. Because
Plaintiffs had abandoned their claim for emotional distress damages under Ohio law, they were no
longer entitled to a jury trial, and the district court announced that there would instead be a bench
trial. Whether this was a correct ruling is not before the Court at this time. On July 13, 2011, the
court also ordered the immediate promotion of Plaintiffs who remained employed by the City, and
ruled that the back-pay period for the firefighters began on April 5, 2007. The district court further
ordered the City to pay $250,000 in attorneys’ fees to Plaintiffs as the prevailing party. The City’s
motion to stay the promotions was denied by both the district court and the Sixth Circuit. City of
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Akron, 723 F.3d 651, 655 (6th Cir. 2013). The damages trial, which had been delayed because of
the motion to stay, was pushed back to July 25, 2011.
Although there is a complicated and somewhat confusing record of various motions and
arguments, the basic issue in this appeal exists because of the dispute regarding how to calculate
back-pay. Plaintiffs, at various points in the litigation, have suggested two different ways of
calculating back-pay. The first method, referred to as the Snyder method, was to calculate the
average salary of all firefighters promoted to the rank of captain or lieutenant at the prior
examination. Then an individual Plaintiff would compare his actual salary for the time period with
the average pay of someone who had been promoted. The alternative method, referred to as the Carr
method, started with the actual salary received by each firefighter during the back-pay period and
incorporated step increases as if each had been promoted. So for year one, a Plaintiff would assume
a certain percentage increase due to the promotion based on his actual salary, then in year two he
would incorporate further increases based on a known pay scale. During the deposition of Bradley
Carr (“Carr”), one of the Plaintiffs, Carr stated that he preferred the method bearing his name, but
that Plaintiffs had abandoned it. The City therefore did not question Carr about the calculations
under that method.
Plaintiffs’ exhibit list for trial included a calculation of damages based on the Snyder method.
But when Plaintiffs filed their amended exhibit list, it included exhibits 207–09, which included loss
calculations based on the Carr method. That amended exhibit list was submitted two days after the
first exhibit list, and ten days before the delayed trial was to open. Defendant objected, claiming that
the exhibits were untimely. Because of both the City’s objection and the pending review of the
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district court’s denial of a stay of the promotions, the trial was delayed until July 25, 2011. After
the trial commenced, the City argued that it had not been able to effectively cross-examine Plaintiffs
on the Carr method at deposition, even though Plaintiffs were relying on the Carr method as their
theory of damages at trial. Rather than rule on the objections, the district court suspended the trial,
and heard arguments about the objections. Having heard arguments, the district court excluded part
of the Plaintiffs’ evidence regarding damages, and reopened discovery to permit re-deposition of two
Plaintiffs on the Carr method-of-damages calculation. After doing so, the district court permitted
the trial to go forward, but at the conclusion of the four-day trial, the court ordered briefing on the
issue of sanctions with respect to Plaintiffs’ attorneys’ conduct during discovery. The district court
also asked the City to provide a calculation of its fees associated with deposing Plaintiffs.
After briefing on the issues, the district court entered, on September 24, 2012, an order that
denied the City’s motion for partial summary judgment, but which also awarded the City $97,056.18
in fees pursuant to 28 U.S.C. § 1927, because it found that Plaintiffs had needlessly multiplied the
proceedings and abused the judicial process. After that order was entered, the City rested its case
in the underlying action. No judgment has yet been entered. On October 19, 2012, Plaintiffs
appealed the order awarding attorneys’ fees. The City moved this Court to dismiss the appeal as
premature. That motion was then referred to this panel.
ANALYSIS
A United States Court of Appeals has jurisdiction only over the final orders and decisions
of a district court. 28 U.S.C. § 1291. That rule “descends from the Judiciary Act of 1789, where
‘the First Congress established the principle that only final judgments and decrees of the federal
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district courts may be reviewed on appeal.’” Cunningham v. Hamilton Cnty., 527 U.S. 198, 203
(1999) (quoting Midland Asphalt Corp. v. United States, 489 U.S. 794, 798 (1989)). A sanction
order is not a final order or decision of the district court, see id. at 210, nor does such an order fit
within the exception to the rule based upon the collateral-order doctrine.
In Cunningham, the Supreme Court found that a sanction imposed on an attorney pursuant
to Federal Rule of Civil Procedure 37(a)(4) was not a final decision, nor could it be appealed on an
interlocutory basis pursuant to the collateral-order doctrine. Id. at 200. As the Supreme Court
described the rule, “a decision is not final, ordinarily, unless it ‘ends the litigation on the merits and
leaves nothing for the court to do but execute the judgment.’” Id. at 204 (quoting Van
Cauwenberghe v. Biard, 486 U.S. 517, 521–22 (1988)). The collateral-order exception “permit[s]
jurisdiction over appeals from a small category of orders that do not terminate the litigation . . .
includ[ing] only decisions that are conclusive, that resolve important questions separate from the
merits, and that are effectively unreviewable on appeal from the final judgment in the underlying
action.” Id. (citations omitted). Since the sanction order here, like that in Cunningham, is likely to
“be inextricably intertwined with the merits,” id. at 205, the collateral-order exception to the
jurisdictional bar does not apply.
In any event, “the collateral order doctrine requires that the order be effectively unreviewable
on appeal from a final judgment.” Id. at 206. Plaintiffs offer little to suggest that the sanction order
will not be reviewable at a later date. Although they claim that Plaintiffs’ counsel will suffer
irreparable reputational harm in the interim, they offer no concrete evidence of this fact. Even
granting some degree of reputational harm, we must recognize that such harm is likely a
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consequence of any sanction order, and therefore, were we to hold the risk of a damaged reputation
sufficient to warrant immediate review, we would make every sanction order immediately
reviewable. This we are not prepared to do. Accordingly, we dismiss the appeal for lack of
appellate jurisdiction.
Plaintiffs make one further argument for review. That argument is that this Court could
convert the appeal into a motion for a writ of mandamus. It is clear that we have the authority to do
so, but mandamus is not appropriate where direct review may be obtained later. See e.g., Balintulo
v. Daimler AG, 727 F.3d 174, 187 (2d Cir. 2013). Only if there is a harm that could not be remedied
on appeal after final judgment should an appeal for which this Court lacks jurisdiction be converted
into an application for the writ. Plaintiffs cite no cases, and we can find none, that hold that
sanctions under the circumstances of this case constitute this sort of harm. The best Plaintiffs could
do was to cite contempt cases that permit such an action, but as the Supreme Court explained in
Cunningham, contempt authority is different from authority to sanction because, whereas contempt
penalties are designed to get the contemnor to comply with an order of the court, discovery sanctions
do not have a prospective element. Cunningham, 527 U.S. at 207. Therefore, any harm as a result
of improperly imposed monetary sanctions can be remedied on direct appeal.
CONCLUSION
For the foregoing reasons, we DISMISS the appeal for lack of jurisdiction.
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Gilman, J., concurring. I fully concur with the lead opinion in this case, which holds that
we lack interlocutory jurisdiction over this appeal. For the potential benefit of the parties in
ultimately resolving this case, however, I write separately to express my doubts regarding the
propriety of the sanctions order imposed by the district court. As an initial matter, the Sixth Circuit
has repeatedly cautioned against imposing sanctions on civil rights plaintiffs because the
freewheeling imposition of sanctions might chill future meritorious lawsuits. See, e.g., Garner v.
Cuyahoga Cnty. Juvenile Ct., 554 F.3d 624, 635 (6th Cir. 2009) (“[A]warding attorney fees against
a nonprevailing plaintiff in a civil rights action is an extreme sanction, and must be limited to truly
egregious cases of misconduct.”) (internal quotation marks omitted). Similarly, imposing sanctions
on attorneys pursuant to 28 U.S.C. § 1927 should be limited to instances involving serious
misrepresentations or vexatious litigation tactics, neither of which appear to be present here. See
Jones v. Cont’l Corp., 789 F.2d 1225, 1230 (6th Cir. 1986) (discussing § 1927 sanctions).
The sanctions strike me as particularly inappropriate because of the severe time constraints
imposed on the plaintiffs by the district court’s timing of its own orders. Although the discovery
cutoff date was June 17, 2011, the court did not issue its order regarding the commencement date
for backpay until July 13, 2011, almost a month after the close of discovery and less than two weeks
before the damages phase of the trial began. This order, which set April 5, 2007 as the start date for
the award of backpay instead of the year 2005, required the plaintiffs to revisit their calculation of
damages. The Carr method, unlike the Snyder method, contained the correct start date for backpay
and used a gross-up methodology to more accurately calculate the backpay due the firefighters.
Given these time constraints, the conduct of the firefighters’ counsel looks less egregious.
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The last-minute determination of the start date also makes the district court’s characterization
of the actions by the firefighters’ counsel as a “bait and switch” tactic appear overwrought. True
enough, the district court’s frustration with the seemingly interminable nature of this seven-year-old
case is understandable. See United States v. Hastings, 847 F.2d 920, 923 (1st Cir. 1988) (“[J]ustice
delayed is justice denied.”). But the computation of damages in this case does not appear to require
anything more sophisticated than the underlying payroll data, a grasp of arithmetic, and an Excel
spreadsheet. The relative ease with which damages can be calculated is best evidenced by the fact
that two non-experts, Snyder and Carr, devised the competing methods for calculating them.
Also troubling is the fact that neither party in this case has clean hands. The City, for its part,
improperly attempted to relitigate the merits of the case during the damages phase. Moreover, as
the lead opinion points out, the City resisted producing its damages calculations during discovery.
Yet the City, unlike counsel for the firefighters, received only a comparative “slap on the wrist”
from the district court for its bad behavior. Neither the City’s conduct nor that of the firefighters’
counsel should be condoned, but the firefighters’ attorneys appear to have been disproportionately
penalized by the court.
Finally, the amount of the sanctions award seems to bear little relationship to the harm, if
any, caused by the switch. Instead of reimbursing the City only for the costs incurred in redeposing
the plaintiffs in June 2011, the district court totaled all of the City’s fees and costs from January
2011 until July 2011 and then reduced the total by half. This lack of precision in isolating the harm
allegedly caused by the conduct of the firefighters’ counsel does not pass muster under 28 U.S.C.
§ 1927. See Peterson v. BMI Refractories, 124 F.3d 1386, 1396 (11th Cir. 1997) (noting that the
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“sanction must bear a financial nexus to the excess proceedings”). For all of these reasons, the
sanctions award strikes me as an unjustified overreaction by the district court.
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