Opinion
98 Civ. 2270 (THK)
December 6, 2001
MEMORANDUM OPINION AND ORDER
Plaintiffs in this employment discrimination action, the Equal Employment Opportunity Commission ("EEOC") and Ronald S. Walden, have brought claims against Defendant, Yellow Freight System, Inc. ("Yellow Freight"), under the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12112, et seq., and the New York Human Rights Law, N.Y. Exec. Law § 290, et seq. The parties have consented to trial before me, pursuant to 28 U.S.C. § 636 (c).
Before the Court are two motions in limine filed by the Defendant. The first motion seeks to deduct workers' compensation payments from any award of back pay Plaintiff Walden may win at trial. The second seeks to exclude from evidence the administrative findings of the EEOC and the New York Division of Human Rights (NYDHR). The Court will address each of these in turn.
I. Defendant's Motion In Limine to Offset Workers' Compensation Benefits from Potential Back Pay
Defendant has moved to offset any award of back pay Plaintiff may receive at trial by the amount of workers' compensation benefits that have already been paid to Plaintiff. Because those benefits came directly from Defendant, through its self-funded workers' compensation program, Defendant argues that the collateral source rule, which bars reduction of a plaintiff's back pay award by benefits received from third parties, does not apply. Plaintiffs oppose the motion on the grounds that Defendant has made no showing that the workers' compensation payments made to Plaintiff correspond to an "item of loss" of the potential award or that these payments in fact came directly from Defendant rather than the New York State Insurance Fund, as is more typical.
A. Plaintiffs' ADA Claim
In federal employment cases, the decision as to whether or not to deduct benefits received from a collateral source, such as workers' compensation, from an award of back pay, rests within the sound discretion of the district court. See Dailey v. Société Générale, 108 F.3d 451, 460 (2d Cir. 1997). However, courts in this Circuit typically decline to set off benefits received from unrelated sources from back pay awards. See, e.g., Shannon v. Fireman's Fund Ins. Co., 136 F. Supp.2d 225, 232 (S.D.N.Y. 2001) (collecting cases). The rationale behind courts' adherence to the collateral source rule, despite the fact that it may effectively grant a windfall to plaintiffs, is that "[a]s between the employer, whose action may have caused the discharge, and the employee, who may have experienced other noncompensable losses, it is fitting that the burden be placed on the employer." See id. (quoting Promisel v. First Am. Artificial Flowers, Inc., 943 F.2d 251, 258 (2d Cir. 1991)) (internal quotation marks omitted).
This rationale disappears, however, when the employer itself is the source of the benefit — that is, where the source of the benefit is not "collateral." See Stratton v. Dep't for the Aging for the City of New York, 922 F. Supp. 857, 866 (S.D.NY. 1996); Williams v. Sec'y of the Navy, 853 F. Supp. 66, 72 (E.D.N.Y. 1994). In both Stratton and Williams, the court deducted unemployment compensation from the plaintiff's award of back pay because the defendant — in each case a government agency — had itself provided the unemployment benefits.See Stratton, 922 F. Supp. at 866; Williams, 853 F. Supp. at 72; see also McLean v. Runyon, 222 F.3d 1150, 1155-56 (9th Cir. 2000) (declining to apply collateral source rule in Rehabilitation Act case where defendant had paid entirely for plaintiff's workers' compensation)
Plaintiffs seem to concede that an offset would be appropriate if in fact "the amount to be offset was provided by the employer itself." (Plaintiffs' Memorandum in Opposition to Defendant's Motion In Limine to Offset Workers' Compensation Benefits from Potential Back Pay ("Pl. Back Pay Mem.") at 2.) Plaintiffs base their opposition largely on factual grounds, arguing that Defendant has made no showing that it actually made the workers' compensation payments directly to Walden rather than simply paying premiums to the State Insurance Fund. (Id. at 3.) In its Reply, Defendant cites to the declaration of a claims examiner at Yellow Freight stating that Defendant is self-insured for workers' compensation and that Defendant did in fact pay workers' compensation benefits directly to Walden. (Defendant's Reply to Plaintiffs' Memorandum in Opposition to Defendant's Motion In Limine to Offset Workers' Compensation Benefits from Potential Back Pay ("Def. Back Pay Reply") at 2; Declaration of Susan Showers.) The Court finds that the representations in the Showers Declaration, if true, would entitle Defendant to set off any award of back pay by the amount of workers' compensation Defendant has already paid to Walden. Thus, because this case will be tried to the Court (and not before a jury, and therefore there can be no prejudice to Plaintiffs by having a jury's assessment of damages be tainted by their knowledge of collateral source payments), the Court will permit Defendant to introduce evidence at trial establishing its entitlement to such a setoff. Plaintiffs will remain free, of course, to challenge this evidence or to offer their own evidence on this issue. Cf. Taylor v. Polygram Records, No. 94 Civ. 7689 (CSH), 1999 WL 124456, at *26 (S.D.N.Y. Mar. 8, 1999) (deferring until after trial the discretionary determination regarding whether or not to offset potential back pay award by amount of unemployment benefits received).
B. Plaintiffs' New York Human Rights Law Claim
Plaintiffs argue that under New York law, benefits paid even by an employer may only be deducted from a damages award where such benefits compensate the particular category of damages, or "item of loss," awarded at trial. (P1. Back Pay Mem. at 2.) Plaintiffs cite Oden v. Chemung County Indus. Dev. Aqency, 87 N.Y.2d 81, 86, 637 N.Y.S.2d 670, 672 (1995), in which the New York Court of Appeals held that New York C.P.L.R. § 4545(c), which permits certain damages awards to be set off by collateral benefits, requires a direct correspondence between the type of loss compensated by the damages award and the type of collateral benefit received. Plaintiffs do not offer much explanation of how the Oden rule would apply in this case. The Court need not spend any time on this question, however, as it appears quite plain that C.P.L.R. § 4545(c) applies only to personal injury actions. Plaintiffs do not cite, nor has this Court found, a New York case applying N.Y.C.P.L.R. § 4545(c) to a discrimination claim. Cf. Greenway v. Buffalo Hilton Hotel, 951 F. Supp. 1039, 1067 (W.D.N.Y. 1997) (finding no authority for extending § 4545(c) to an employment discrimination action),aff'd as modified, 143 F.3d 47 (2d Cir. 1998). Indeed, as the Greenway court and Plaintiffs themselves point out, the New York Court of Appeals has explicitly stated that § 4545(c) should be strictly construed. See id., 951 F. Supp. at 1067; (P1. Back Pay Mem. at 3). Therefore, this Court will not require Defendant to show that the benefits received by Plaintiff correspond to the so-called item of loss. Rather, as with Plaintiffs' ADA claim, this Court will permit an offset to any back pay recovery by Plaintiff under New York's Human Rights Law, based on a showing by Defendant at trial that it paid workers' compensation benefits directly to Plaintiff. Cf. Grand Union Co. v. Mercado, 263 A.D.2d 923, 925, 694 N.Y.S.2d 594, 527 (3d Dep't 1999) (reducing award for discrimination by workers' compensation benefits).
For example, in Oden the defendant was not permitted to reduce the future lost earnings awarded to plaintiff at trial by the amount plaintiff would receive in future disability retirement benefits. See id. at 86, 637 N.Y.S.2d at 672.
II. Defendant's Motion In Limine to Exclude from Evidence the Determinations of the NYDHR and the EEOC
Defendant has also moved to exclude evidence at trial of the determinations and findings by the NYDHR and the EEOC regarding Plaintiff's discrimination claim. The NYDHR found probable cause to believe that Defendant had discriminated against Plaintiff Walden because of his disability; similarly, the EEOC found reasonable cause to believe that Defendant had violated the ADA by denying Walden a reasonable accommodation and by discharging him. Defendant argues that these agency determinations should be excluded as hearsay because they are untrustworthy, and thus do not satisfy the requirements of Rule 803(8) (C) of the Federal Rules of Evidence. Defendant further argues that admission of the agency findings would be prejudicial, confusing, and misleading, and would cause undue delay. Plaintiffs defend the trustworthiness of these determinations, and claim that an analysis under Fed.R.Evid. 403 leads to the conclusion that their probative value is not substantially outweighed by their possible prejudice to Defendant.
Plaintiffs claim that the agency determinations are trustworthy and therefore admissible under Fed.R.Evid. 803(8)(C), an exception to the hearsay rule that provides for the admissibility of investigative reports by public agencies. Defendant argues that both determinations are so lacking in trustworthiness as to preclude their admissibility under Rule 803(8)(C). This Court agrees with Plaintiff. Contrary to Defendant's assertions, the fact that the NYDHR report may contain a now-discredited view of the law does not render its factual findings untrustworthy. Nor does the EEOC's reliance on those findings render its "probable cause" determination untrustworthy.
However, the fact that the determinations satisfy Rule 803(8)(C) does not make them admissible per se. See Paolitto v. John Brown E. C., Inc., 151 F.3d 60, 64 (2d Cir. 1999). Rather, the Court retains discretion under Rule 403 to determine whether or not to admit the agency determinations. See id. As the Second Circuit explained in Paolitto,
[W]e believe that the district court is in the best position to consider the quality of the report, its potential impact on the jury, and the likelihood that the trial will deteriorate into a protracted and unproductive struggle over how the evidence admitted at trial compared to the evidence considered by the agency.Id. at 64. Affecting this Court's exercise of its discretion in this case is the fact this is a bench trial. (The parties submitted the instant motion before the case had been so designated.) Though this fact does not render Defendant's motion moot, it substantially diminishes the concerns raised therein. The Court's analysis under Rule 403 differs from what it would be in a jury trial. See Barfield v. Orange Co., 911 F.2d 644, 651 (11th Cir. 1990). This Court is well aware, as perhaps even a wellinstructed jury might not be, of the limitations of administrative determinations, and will not permit the administrative determinations at issue here to substitute for Plaintiffs' satisfying their burden of proof at trial. Indeed, given the limited weight the Court is likely to place on the administrative findings, the Court would discourage Plaintiffs from excessive reliance on them at trial. Cf. EEOC v. Regency Architectural Metals Corp., 896 F. Supp. 260, 263 (D. Conn. 1995) (giving EEOC determinations no weight because "[t]hey consist largely of brief factual assertions which were the subject of testimony at the trial, and legal reasoning, which is the province of the court"). Finally, all parties can rest assured that this Court will not allow the trial to be unduly delayed by argument and evidence concerning the merit of the agencies' findings.
Accordingly, Defendant's motion to exclude from evidence the determinations and findings of the EEOC and NYHDR is denied.
CONCLUSION
Defendant's motion to offset a potential back pay award is granted to the extent that it will be permitted to offer evidence at trial demonstrating its entitlement to reduce any back pay award by the amount of workers' compensation benefits it directly provided Plaintiff, and denied to the extent that Defendant has moved this Court to make a final determination on this issue in limine.
Defendant's motion to exclude evidence of the NYDHR and EEOC determinations is denied.