Opinion
Civil. Act. No. 5:01CV00067
November 6, 2002
MEMORANDUM OPINION
Before the court are the following post-trial filings: (1) "Plaintiff's Post-Trial Motion for Front Pay Damages and Prejudgment Interest," filed October 11, 2002; (2) "Plaintiff's Memorandum of Law in Support of Plaintiff's Post-Trial Motion for Front Pay Damages and Prejudgment Interest," filed October 10, 2002; (3) "Plaintiff's Petition and Memorandum in Support for Attorney's Fees," filed October 11, 2002; (4) "Defendant's Motion to Apply the Statutory Cap and for Remittitur," filed October 18, 2002; (5) "Defendant's Post-Trial Brief," filed October 18, 2002; (6) "Plaintiff's Reply Memorandum in Support of Post-Trial Motion for Front Pay Damages and Prejudgment Interest," filed October 23, 2002; (7) "Plaintiff's Memorandum of Law in Opposition to Defendant's Motion for Remittitur," filed October 23, 2002; (8) "Plaintiff's Supplemental Petition for Attorney's Fees," filed October 23, 2002; and "Defendant's Supplemental Brief on the Rate Applied to Pre-Judgment Interest, if Awarded," filed October 24, 2002.
After a full jury trial on the merits, plaintiff Proffitt prevailed on his gender discrimination, retaliation, and constructive discharge claims. By its verdict of October 1, 2002, the jury awarded Proffitt $412,096 in back pay damages and $356,000 in compensatory damages. The court now has before it various filings pertaining to the parties' post-trial motions. Specifically, the plaintiff moves this court for an award of front pay damages, prejudgment interest on his back pay award, and reasonable attorney's fees. The defendant, conversely, asks the court to apply the statutory cap to the plaintiff's award of compensatory damages. Additionally, the defendant Secretary moves this court to reduce further the plaintiff's compensatory damages award by remittutur. Having thoroughly considered the various motions, the memoranda in support and the responses thereto, the applicable law, the entire record, and for the reasons set forth below, the "Plaintiff's Post-Trial Motion for Front Pay Damages and Prejudgment Interest," filed October 11, 2002, shall be GRANTED IN PART and DENIED IN PART; the "Plaintiff's Petition and Memorandum in Support for Attorney's Fees," filed October 11, 2002, shall be GRANTED IN PART and DENIED IN PART; the "Defendant's Motion to Apply the Statutory Cap and for Remittitur," filed October 18, 2002 shall be GRANTED IN PART and DENIED IN PART; and the "Plaintiff's Supplemental Petition for Attorney's Fees," filed October 23, 2002 shall be GRANTED.
I. Front Pay
The purpose of Title VII is to "make persons whole for injuries suffered on account of unlawful employment discrimination." Albemarle Paper Co. v. Moody, 422 U.S. 405, 418 (1975). Congress, therefore, has armed the courts with full equitable powers. Id. In trying to make a victim of employment discrimination whole, "front pay is an available remedy to complete the panoply of remedies available to avoid the potential for future loss." Duke v. Uniroyal, Inc., 928 F.2d 1413, 1423 (4th Cir. 1991) (Title VII case).
Simply stated, front pay is the "money awarded for lost compensation during the period between judgment and reinstatement or in lieu of reinstatement." Pollard v. E.I. du Pont de Nemours Co., 532 U.S. 843, 846 (2001). As form of equitable relief, front pay is intended to compensate victims of discrimination for the continuing future effects of discrimination until the victim can be made whole. Estate of Pitre v. Western Elec. Co., 975 F.2d 700, 703 (10th Cir. 1992), cert. denied, 510 U.S. 972 (1993) (Title VII). The award of front pay rests squarely within the district court's discretion, which must be "tempered" by "the potential for windfall" to the plaintiff. Nichols v. Ashland Hosp. Corp., 251 F.3d 496 (4th Cir. 2001) (quoting Duke v. Uniroyal, Inc., 928 F.2d at 1424); see also Albemarle Paper Co. v. Moody, 422 U.S. 405, 421 (1975).
With this background in mind, the court must consider whether to award front pay to plaintiff Proffitt. Where, as here, a legal injury is of an economic character, "the general rule is, that when a wrong has been done, and the law gives a remedy, the compensation shall be equal to the injury. The latter is the standard by which the former is measured." Albemarle Paper Co. v. Moody, 422 U.S. 405, 418 (1975) (quoting Wicker v. Hoppock, 6 Wall. 94, 99 (1867)).
Accordingly, plaintiff Proffitt is to be placed, as near as may be, in the situation he would have occupied if the wrong had not been committed. Id. To that end, Proffitt contends that he can only be made whole through an award of front pay that would compensate him for future economic loss attributable to the defendant's unlawful employment actions. The court disagrees.
The plaintiff already has been awarded in excess of $700,000 by the jury in the form of back pay and compensatory damages. Considering that Title VII makes clear that the purpose of damages in an employment discrimination case is to make the plaintiff whole, and that it is in the full discretion of the trial court to determine whether to award front pay, the court finds that the damages awarded to Proffitt by the jury in the form of back pay and compensatory damages have made plaintiff Proffitt whole. Further compensation to the plaintiff would constitute a windfall. Accordingly, the court will not award Proffitt further compensation in the form of front pay. The plaintiff's motion for front pay damages, therefore, shall be DENIED.
II. Prejudgment Interest
As noted earlier, in addition to its award of compensatory damages, the jury awarded plaintiff Proffitt $412,096 in back pay damages in the above-captioned civil action. The plaintiff now "seeks prejudgment interest on this back pay award to make him whole." Plaintiff's Memorandum of Law in Support of Plaintiff's Post-Trial Motion for Front Pay Damages and Prejudgment Interest, page 7.
The award of prejudgment interest is a matter within the district court's discretion. See, e.g., United States v. Gregory, 818 F.2d 1114, 1118 (4th Cir. 1987), cert. denied, 484 U.S. 847 (1987) ("A decision whether to award prejudgment interest as a compound to relief is entrusted to the discretion of the district court."). There are, however, authorities that affect the exercise of that discretion. "It is ordinarily an abuse of discretion not to include prejudgment interest in a back pay award . . ." Maksymchuk v. Frank, 987 F.2d 1072, 1077 (4th Cir. 1993) (quoting Clarke v. Frank, 960 F.2d 1146, 1153-54 (2d Cir. 1992) (citations omitted)); see also McKnight v. General Motors Corp., 973 F.2d 1366, 1372-73 (7th Cir. 1992) (holding that "prejudgment interest should be presumptively available to victims of federal law violations.") (citations omitted)).
It is worthy of note, however, that prejudgment interest is frequently denied when the back pay award is not readily determinable or when the plaintiff fails to raise issues in a timely or an appropriate manner. Maksymchuk, 987 F.2d at 1077 (4th Cir. 1993); see also Domingo v. New England Fish Co., 727 F.2d 1429, 1446 (9th Cir. 1984) ("The fact that the amount of backpay is not readily determinable weighs against awarding prejudgment interest."). Neither concern has manifested itself in this action. The back pay award was readily determinable and the plaintiff made his request for prejudgment interest on that award in a timely manner. The court, then, is left with the general policy that, absent the aforementioned concerns, prejudgment interest should be included in a back pay award to make a victim whole. Maksymchuk, 987 F.2d at 1077 (quoting Pegues v. Mississippi State Employment Serv., 899 F.2d 1449, 1453 (5th Cir. 1990)). Accordingly, the court shall award plaintiff Proffitt prejudgment interest on his back pay award.
The more difficult question, however, is determining how to calculate prejudgment interest. The basic purpose of prejudgment interest is to correct for the fact that a dollar yesterday was worth more than a dollar today. See, e.g., Maksymchuk, 987 F.2d at 1076-77. To do so, the defendant contends that the "appropriate rate for computing pre-judgment interest is that for 30-day Treasury Bills, the rate used under 28 U.S.C. § 1961(a)." Defendant's Supplemental Brief on the Rate Applied to Pre-Judgment Interest, if Awarded, page 1. The plaintiff, conversely, argues that the Virginia statutory rate of 9% should be applied.
It is well settled that 28 U.S.C. § 1961 applies to post-judgment interest. It is equally well settled that § 1961, by its own operation, does not apply to prejudgment interest in federal question cases. See, e.g., Sun Ship, Inc. v. Matson Navigation Co., 785 F.2d 59 (3rd Cir. 1986). While the section does not preclude prejudgment interest, the rate of interest, along with whether to grant prejudgment interest in the first instance, is committed to the sound discretion of the district court. See, e.g., United States v. Dollar Rent-A-Car Systems, Inc., 712 F.2d 938 (4th Cir. 1983); In re Burlington Northern, Inc., 810 F.2d 601 (7th Cir. 1986), cert. denied, 484 U.S. 821.
Courts have held that state law applies to questions involving prejudgment interest in diversity cases. United States v. Dollar Rent-A-Car Systems, Inc., 712 F.2d at 940. The jurisdiction of the court in this case, however, is not based on diversity of citizenship. The court, therefore, is not bound by the interest rate of Virginia, the forum state, but must use its discretion is setting the proper rate. Id. at 841. To do so, the court has surveyed the relevant case law. There is little guiding decisional authority in the circuits, let alone in the Western District of Virginia, pertaining directly to the circumstances currently before the court. There is one decision out of the Eastern District that, while not binding, has addressed the issue presently before the court.
In Cooper v. Paychex, Inc., 960 F. Supp. 966 (E.D.V.A. 1997), which was also a Title VII employment discrimination case, the district court held that "the Virginia statutory rate should be applied" to calculate prejudgment interest. Id. at 974. In adopting the 9% Virginia rate, the court also noted that it knew "of no binding precedent which dictates otherwise." Id. Additionally, in Queensbury v. Life Ins., Co., 987 F.2d 1017, 1031 (4th Cir. 1991) and EEOC v. Liggett Myers, Inc., 690 F.2d 1072, 1074-75 (4th Cir. 1982), the Fourth Circuit upheld the respective district courts' application of the state interest rate even though the use of such rate was not binding.
The court, therefore, shall grant plaintiff Proffitt's motion for prejudgment interest and shall apply the Virginia statutory rate of 9%, which is the rate supported by the guiding decisional authority in this circuit. To that end, the court shall award the plaintiff $164,131.07 in prejudgment interest, which is calculated by dividing the $412,096 back pay award among the years for which the back pay was awarded.
The court calculated Proffitt's prejudgment interest on a monthly compounded basis, which is neither an overly conservative nor aggressive approach.
III. Attorney's Fees
In addition to seeking front pay and prejudgment interest, plaintiff Proffitt also petitions this court for an award of reasonable attorney's fees. Title 14 U.S.C. § 2000e-5(k) permits a court to award attorney's fees to the prevailing party in a Title VII suit. The Fourth Circuit has explained that "[t]he purpose of awarding fees is to encourage attorneys to prosecute cases that vindicate the objectives of Title VII though they might be economically unattractive under a contingency fee arrangement. Fees should be high enough to encourage the attorneys to take cases without awarding windfalls." Dennis v. Columbia Colleton Medical Ctr, Inc., 290 F.3d 639, 652 (4th Cir. 2002) (internal citations omitted). In calculating attorney's fees, courts in the Fourth Circuit are to employ the "loadstar" formula, "multiplying the number of hours reasonably expended by counsel by reasonable hourly rate." Id. In making the reasonableness determinations, the trial court is to use the twelve factor test articulated in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). Id.In Plyler v. Evatt, 902 F.2d 273, 282 n. 2 (4th Cir. 1990), the Fourth Circuit articulated the twelve Johnson factors as: (1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to perform properly the legal services rendered; (4) the attorney's opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorney's expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between attorney and client; and (12) attorneys' fees awards in similar cases.
After carefully applying the twelve Johnson factors, and after thoroughly reviewing the plaintiff's petition, which includes a detailed description of the tasks, hours and hourly rates applied to the litigation of the above-captioned civil case, the court determines that the plaintiff's request of $192,511.34 in attorney's fees and $13,096.85 in costs is reasonable. Even the defendant concedes that she "finds Plaintiff's itemized billing record to be reasonable under the circumstances." Defendant's Post-Trial Brief, page 1.
Additionally, Proffitt seeks an enhancement of 20% on his final attorney's fee award. In support of his request, the plaintiff cites Hensley v. Eckerhart, 461 U.S. 424 (1983), in which the Supreme Court noted that "in some cases of exceptional success an enhanced award may be justified." Id. at 435. Grants of enhancement, however, are both discretionary and rare, and Proffitt bears the burden of proof of an exceptional result. Johannssen v. District No. 1 — Pacific Coast District, MEBA Pension Plan, 292 F.3d 159 (4th Cir. 2002) (citations omitted).
In the present matter, the plaintiff bases his claim for an enhancement primarily on the degree of his success in prevailing on all three of his claims and the magnitude of the award. As the Johannssen court explained, however, "the results obtained are initially factored into the loadstar calculation of a reasonable fee and hours expended under the test set out in Johnson, and thus are not generally a sufficient basis for an enhancement unless `exceptional.'" Id. (citing Blum v. Stenson, 465 U.S. 886, 899-900 (1984).
While the results procured by plaintiff's counsel in this matter are impressive, they are not "exceptional." The plaintiff simply obtained the results he sought from the beginning of this litigation. The court, therefore, shall not grant plaintiff Proffitt's request for a 20% enhancement on his final attorney's fee award.
IV. Motion to Apply the Statutory Cap on Compensatory Damages
Title 42 U.S.C. § 1981 provides that "[i]n an action brought by a complaining party under [Title VII] . . . the complaining party may recover compensatory [damages] . . . as allowed in subsection (b) . . ." 42 U.S.C. § 1981a(a)(1). Subsection (b) states that "[t]he sum of the amount of compensatory damages . . . shall not exceed . . . in the case of a respondent who has more than 500 employees . . . $300,000." 42 U.S.C. § 1981a(b)(3)(D). In this matter, the jury awarded plaintiff Proffitt $356,000 in compensatory damages. Pursuant to 42 U.S.C. § 1981a(b)(3)(D), the plaintiff's compensatory damage award shall be reduced to the statutory cap of $300,000.
V. Remittitur
The defendant also requests that the court further reduce the plaintiff's compensatory damage award to "$100,000 or $150,000 . . . so that Defendant will not be unjustly penalized." Defendant's Post-Trial Brief, page 4. Remittitur, which is used in connection with FED.R.CIV.P. 59(a), is the process by which a court reduces the damages awarded in a jury verdict. Cline v. Wal-Mart Stores, Inc., 144 F.3d 294, 305 (4th Cir. 1998). "The permissibility of remittiturs is now settled." Id. (quoting Atlas Food Systems and Services, Inc. v. Crane Nat'l Vendors, 99 F.3d 587, 593 (4th Cir. 1996)). If the district court concludes that a verdict is excessive, therefore, "it is the court's duty to require a remittitur or order a new trial, and the failure to do so constitutes an abuse of discretion." Id. (citations omitted). The decision as to whether damages are excessive and should be subject to remittitur is entrusted to the sound discretion of the trial court. Robles v. Prince George's County, Maryland, 302 F.3d 262, 271 (4th Cir. 2002).
The Fourth Circuit has explained that, pursuant to Rule 59, "jury determinations of . . . the amount of compensatory damages will be reviewed by determining whether the jury's verdict is against the weight of the evidence or based on evidence which is false." Cline, 144 F.3d at 305 (quoting Atlas Foods, 99 F.3d at 594). "Such a review requires a `comparison of the factual record and the verdict to determine their compatibility.'" Id.
First, there is nothing before the court to indicate that the evidence on which the jury based its award of compensatory damages was false. Second, despite the defendant Secretary's contention to the contrary, the court finds the jury's award of $300,000 in compensatory damages (after reduced to the statutory cap) to be in accordance with the weight of the evidence. The evidence suggests that Proffitt suffered stress and other medical ailments as result of the unlawful employment actions taken against him. Such impermissible conduct, which the evidence indicates is still causing the plaintiff mental anguish, supports the jury's award of $300,000 in compensatory damages. Even more, the jury's verdict does not shock the conscience or obviously exceed the maximum level of a reasonable range within which the jury should operate. Hetzel v. County of Prince William, 89 F.3d 169 (4th Cir. 1996), cert. denied, 519 U.S. 1028 (1997). To that end, the defendant's motion for remittitur shall be DENIED.
VI.
In accordance with the foregoing, the "Plaintiff's Post-Trial Motion for Front Pay Damages and Prejudgment Interest," filed October 11, 2002, shall be GRANTED IN PART and DENIED IN PART; the "Plaintiff's Petition and Memorandum in Support for Attorney's Fees," filed October 11, 2002, shall be GRANTED IN PART and DENIED IN PART; the "Defendant's Motion to Apply the Statutory Cap and for Remittiture," filed October 18, 2002 shall be GRANTED IN PART and DENIED IN PART; and the "Plaintiff's Supplemental Petition for Attorney's Fees," filed October 23, 2002 shall be GRANTED. An appropriate Order shall this day issue.
The Clerk of the Court hereby is directed to send a certified copy of this Memorandum Opinion and the accompanying Order to all counsel of record.
ORDER
For the reasons stated in the accompanying Memorandum Opinion, it is this day ADJUDGED, ORDERED AND DECREED as follows:
(1) Pursuant to the jury's verdict dated October 1, 2002, plaintiff Proffitt shall be awarded $412,096 in back pay damages and $300,000 in compensatory damages (see infra);
(2) The "Plaintiff's Post-Trial Motion for Front Pay Damages and Prejudgment Interest," filed October 11, 2002, shall be GRANTED IN PART and DENIED IN PART in that plaintiff Proffitt shall be GRANTED $164,131.07 in prejudgment interest, but DENIED front pay damages;
(3) the "Plaintiff's Petition and Memorandum in Support for Attorney's Fees," filed October 11, 2002, and "Plaintiff's Supplemental Petition for Attorney's Fees," filed October 23, 2002, shall be GRANTED IN PART and DENIED IN PART in that plaintiff Proffitt shall be GRANTED $205,608.19 in attorney's fees and costs ($192,511.34 in attorney's fees plus $13,096.85 in costs), but DENIED a 20% enhancement on his final attorney's fee award;
(4) the "Defendant's Motion to Apply the Statutory Cap and for Remittitur," filed October 18, 2002, shall be GRANTED IN PART and DENIED IN PART in that plaintiff Proffitt's compensatory damages award shall be reduced to the statutory cap of $300,000, but shall not be further reduced by remittitur.
The Clerk of the Court hereby is directed to send a certified copy of this Order and the accompanying Memorandum Opinion to all counsel of record.