Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


2-2-2004

Potence v. Hazleton Area Sch
Precedential or Non-Precedential: Precedential

Docket No. 03-1535




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"Potence v. Hazleton Area Sch" (2004). 2004 Decisions. Paper 969.
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                       PRECEDENTIAL

                             Filed February 2, 2004

    UNITED STATES COURT OF APPEALS
         FOR THE THIRD CIRCUIT


            Nos. 03-1535, 03-2647


            MICHAEL D. POTENCE
                      v.
    HAZLETON AREA SCHOOL DISTRICT;
       GERALDINE S. SHEPPERSON
         Hazleton Area School District,
                                  Appellant

On Appeal from the United States District Court
    for the Middle District of Pennsylvania
          (D.C. Civil No. 99-cv-02155)
    District Judge: Hon. James M. Munley

  Submitted Under Third Circuit LAR 34.1(a)
             January 12, 2004
 Before: SLOVITER, RENDELL and ALDISERT,
               Circuit Judges

           (Filed: February 2, 2004)

               Robert E. Durrant
               Stephen M. Pincus
               Campbell, Durrant & Beatty, P.C.
               Pittsburgh, PA 15219
                 Attorneys for Appellant
                              2


                      Theodore R. Laputka, Jr.
                      Andrew J. Lentowski
                      Theodore R. Laputka & Associates
                      Hazleton, PA 18201
                        Attorneys for Appellee


                 OPINION OF THE COURT

SLOVITER, Circuit Judge.
  The Hazleton Area School District (the “School District”)
appeals from the Amended Judgment and Order in favor of
appellee Michael D. Potence pursuant to a jury verdict that
the School District had violated the Age Discrimination in
Employment Act (“ADEA”), 29 U.S.C. §§ 621-634. It also
appeals from the award of attorneys’ fees.
   We have jurisdiction to hear this appeal pursuant to 28
U.S.C. § 1291. Because we believe the District Court did
not abuse its discretion in denying the School District’s
motion for judgment as a matter of law, and in denying its
alternative motion for a new trial, and did not abuse its
discretion in calculating the attorneys’ fees, we will affirm.

                              I.
    The School District posted an advertisement seeking to
fill the vacant position of plumbing/HVAC (heating,
ventilation, and air conditioning) instructor. As posted, the
advertisement put forth the following job criteria: “Must
possess or be eligible for PA plumbing and HVAC
certification. Must be able to document minimum two years
related trade/technical experience in both occupations.”
App. at 237. Dr. Edward Lyba, administrative director of
the Hazleton Area Career Center, was appointed by
Superintendent Dr. Geraldine Shepperson to direct the
hiring process.
  Initially five applications were submitted, and only one
candidate, Jeffrey Sweda, was selected for an interview.
After receiving some pressure from the School Board, a
second candidate, John Darrow, was interviewed, and
                             3


despite the hiring committee’s recommendation that Sweda
be hired for the position, the School Board again directed
Dr. Lyba to interview yet another candidate, Michael
Potence.
  The entire original interview committee could not be
reconvened for purposes of the interview with Potence, and
Dr. Lyba added a practical examination on which
applicants had to name parts of a refrigeration unit. Sweda
ranked first, Potence second. Dr. Lyba recommended to
Superintendent Shepperson that Sweda be hired, and
Sweda was hired after the School Board approved his
hiring. Potence filed suit claiming that he was discriminated
against on the basis of his age.
  The School District contends that Potence was not
qualified for the job because he lacked a refrigerant
recapturing certification. Potence responds that this reason
was pretext because, among other things, this certification
has nothing to do with either HVAC or plumbing
instruction, and it was not listed in the advertisement for
the position. A member of the second interview committee,
Mr. Kevin Dodson, could not explain why a refrigeration
exam was used to test plumbing, heating, ventilation, and
air conditioning. There was trial evidence that the reasons
provided to Potence for not interviewing or hiring him
changed over time. He was initially told by Superintendent
Shepperson that he had failed to forward his educational
transcripts, but a postal receipt introduced in evidence
showed that his transcripts had been received in the
required time period; then Dr. Shepperson told him that he
was “crying sour grapes” because the School Board had
hired a fine young instructor; and finally he was told that
he was not hired because he was not certified in
refrigerants. App. at 7.
   Potence also adduced evidence at trial from which the
jury could have concluded that Dr. Shepperson had a
discriminatory animus against older candidates and that
she had control over the hiring process. She directed Dr.
Lyba to hire “no more old plumbers,” and she told someone
else that “we are not going to hire any more old plumbers
because the old plumbers cannot pass the certification
test.” Appellee’s Br. at 5-6. She also made a comment to
                                   4


the effect that the school had hired a “fine young man.”
App. at 7.1
  It was against this factual background that the jury
found for Potence and awarded him $254,000 in damages,
which the District Court reduced by $81,750 to reflect
income that Potence made in other employment. The court
then doubled the award as liquidated damages, pursuant to
the authority given in the ADEA for a court to do so for
“willful” violations, 29 U.S.C. § 626(b), resulting in a
judgment of $344,500. The District Court denied the School
District’s motion for judgment as a matter of law.

                                   II.
  In pertinent part, the ADEA provides, “It shall be
unlawful for an employer . . . to fail or refuse to hire or to
discharge any individual or otherwise discriminate against
any individual with respect to his compensation, terms,
conditions, or privileges of employment because of such
individual’s age . . . .” 29 U.S.C. § 623(a). The burden-
shifting sequence in examining alleged employment
discrimination was set forth in McDonnell Douglas Corp. v.
Green, 

, 802-04 (1973). The plaintiff must
produce sufficient evidence to convince a reasonable
factfinder as to all the elements of a prima facie case of
discrimination. If a plaintiff does establish a prima facie
case, then the burden of production shifts to the defendant
to show that there was a nondiscriminatory reason for the
adverse employment decision. If the defendant does so, the
plaintiff must submit evidence from which a factfinder
could reasonably either (1) disbelieve the employer’s
articulated reasons, or (2) believe that invidious
discrimination was more likely than not the motivating or
determinative cause of the employer’s action. Stanziale v.
Jargowsky, 

, 105 (3d Cir. 2000).
  In order to establish a prima facie case of discrimination,
the plaintiff must demonstrate that (1) s/he is over forty, (2)

1. The portion of the trial testimony quoted in this paragraph was not
filed of record, and is therefore taken from the Appellee’s brief and the
District Court’s opinion.
                               5


is qualified for the position in question, (3) suffered from an
adverse employment decision, and (4) that his or her
replacement was sufficiently younger to permit a reasonable
inference of age discrimination. Duffy v. Paper Magic Group,
Inc., 

, 167 (3d Cir. 2001). The School District
challenges only the second of the criteria, and has asserted
throughout       that   Potence     lacked     the    necessary
qualifications.
A. Whether the evidence showed that Potence was
qualified for the position, and whether the lack of a
refrigerant    certification  was   a   pretext   for
discrimination.
  In reviewing whether the School District was entitled to
judgment as a matter of law, we must review the record in
the light most favorable to the prevailing party “unless the
record is critically deficient of that minimum quantum of
evidence from which a jury might reasonably afford relief.”
Rotondo v. Keene Corp., 

, 438 (3d Cir. 1992)
(quotations and citations omitted). The School District’s
only argument that Potence was not qualified for the
position was that he lacked a federal certification to handle
refrigerants. Dr. Lyba testified that the School District had
purchased diagnostic equipment relating to HVAC
troubleshooting, and that this equipment required the
operator to introduce refrigerant into, and remove
refrigerant from, the machine. Because this equipment was
purchased before the instructor position was advertised,
the School District argues the certification in question was
a prerequisite, rather than a pretext, for age discrimination.
  It is undisputed that Potence did not possess this
certification, but there was sufficient evidence from which
the jury could have found that the School District’s reliance
on this qualification was a pretext for discrimination. It is
not contested that the advertisement for the position failed
to list this as a qualification. The School District asserts
that it would not be reasonable to expect the advertisement
to “put potential applicants on notice of every essential job
qualification.” Appellant’s Br. at 21. In light of the fact that
the advertisement already listed plumbing and HVAC
certification as two of its criteria, the jury could reasonably
have concluded that “refrigerant” also would have been
                              6


included if it were an essential qualification. Another fact
that the jury could have considered in concluding the
School District’s reason was pretext was that Potence was
given various reasons at different stages of the hiring
process as to why he was not hired or given an initial
interview. There was also testimony of several ageist
remarks arguably attributable to Dr. Shepperson.
   The School District nonetheless objects that Dr.
Shepperson was not in control of the hiring process. We
have held that stray remarks by non-decisionmakers alone
are insufficient to establish discriminatory intent, Walden v.
Georgia-Pacific Corp., 

, 513-14 (3d Cir. 1997),
but this argument fails in the instant case for two reasons.
First, it is not only these remarks that give rise to an
inference of discriminatory intent. The different stories told
to Potence over the course of the process, the failure to
even mention refrigerant certification in the notice of the
position, the unplanned decision to create a refrigerant
exam at the end of the hiring process (after Dr. Lyba had
twice recommended Sweda for the position, and twice been
told to slow down) constitute sufficient evidence from which
a jury might have inferred discrimination. Second, and
more importantly, there is evidence on the record that Dr.
Shepperson did wield some influence over the process. We
have held that persons who have “the direct ability to
influence hiring and firing decisions” may be held liable for
discrimination. Levendos v. Stern Entertainment, Inc., 

, 752 (3d Cir. 1990). Dr. Shepperson was the
person who told Potence why he did not receive an
interview; she told the interviewing committee during
Potence’s interview, “I am sorry you have to go through this
again because of some people;” and she testified that she
was ultimately responsible for all the hiring activities of the
School District. App. at 8.
  The School District presented evidence that she did not
participate in the process. If we were sitting as jurors, we
might have found that evidence persuasive. However, we
are not the jurors. The evidence viewed in the light most
favorable to the verdict winner allowed a reasonable jury to
infer that Potence was qualified for the position and that
the refrigerant certification qualification served as a pretext
                              7


for age discrimination. Therefore, we will affirm the District
Court’s denial of the motion for judgment as a matter of
law.
B. Whether the District Court erred in failing to
provide the requested jury interrogatory.
   We review the formulation of special interrogatories for
abuse of discretion. Merritt Logan, Inc. v. Fleming Cos., 

, 367-68 (3d Cir. 1990). The special interrogatory
given to the jury was, “Has Plaintiff, Michael Potence,
proved by a preponderance of the evidence that the
Defendant, Hazleton Area School District, discriminated
against him on the basis of age in violation of the Age
Discrimination in Employment Act?” App. at 55-56. The
School District requested that the Court include the
following special interrogatory, “Do you find that Mr. Sweda
would have been hired even if Mr. Potence’s age had not
been considered?”, but the trial court denied that
interrogatory. App. at 206.
  The School District contends that the District Court’s
refusal to include this question provided the jury with only
half the applicable legal standard. We reject that
contention. It is not realistic to view the issue posed by this
case as consisting of two halves. There was one issue:
whether Potence was discriminated against in violation of
the ADEA.
   The School District cites an opinion in which the court
stated that “[i]n a complicated case such as this, the special
interrogatory device localizes and focalizes the specific
problems and issues whereas a general verdict often
permits improper jury meandering.” Jamison Co. v.
Westvaco Corp., 

, 935 (5th Cir. 1976).
However, at issue in that case was a contract and damages
computation by the jury that had “many possible
alternatives, asymetrical [sic] incongruencies, potential
solecisms, and error compounded upon error.” 

   the    instant   case   is  a    straightforward
discrimination claim with no such labyrinth for a juror to
navigate.
  The District Court addressed the issue raised by the
School District in the following jury charge: “If the Plaintiff
                             8


has offered evidence from which you could conclude that
the Defendant School District discriminated against him
because of his age, then the Plaintiff is entitled to recover
unless the School District proves by a preponderance of the
evidence that it would have taken the same action
regardless of the Plaintiff ’s age.” App. at 11. Inasmuch as
the Court gave this charge, it did not abuse its discretion
in declining to give the requested special verdict
interrogatory.
C. Whether liquidated damages may be               assessed
against the School District under the ADEA.
   Based on the jury’s finding that the School District acted
willfully when it violated the ADEA, the District Court
invoked the liquidated damages provision of the ADEA and
doubled Potence’s award of damages. The School District
contends that it cannot be compelled to pay liquidated
damages due to its status as a municipality because
liquidated damages are punitive in nature. We have not
previously considered this issue in the context of the
statutory framework of the ADEA. As we must interpret the
relevant provisions of the ADEA, the issue is a legal one
over which we exercise plenary review. Smith v. Holtz, 

, 200 (3d Cir. 2000).
   The ADEA incorporates the enforcement powers,
remedies, and procedures of the Fair Labor Standards Act
(“FLSA”) set forth in 29 U.S.C. §§ 211(b), 216 (except for
subsection (a)), and 217. 29 U.S.C. § 626(b). The
enforcement provision of the FLSA expressly provides for
imposition of liquidated damages payable “in cases of willful
violations of this chapter.” 29 U.S.C. § 626(b). The FLSA
further provides that “[a]ny employer who violates [the
FLSA] shall be liable to the employee or employees affected
in the amount of their unpaid minimum wages, or their
unpaid overtime compensation, as the case may be, and in
an additional equal amount as liquidated damages.” 29
U.S.C. § 216(b). Thus, when a jury finds that an employer
willfully violated the ADEA, the basic damages award may
be doubled under this liquidated damages provision.
  The School District argues that liquidated damages may
not be assessed against municipalities because they are
                              9


punitive. There is an historical tension between municipal
liability and damages imposed as punishment. Cook County
v. United States ex rel. Chandler, 

, 1246
(2003). “Since municipalities’ common law resistance to
punitive damages still obtains, ‘[t]he general rule today is
that no punitive damages are allowed unless expressly
authorized by statute.’ ” 

v. Fact
Concerts, Inc., 

, 260 n.21 (1981)). In assessing
whether liquidated damages under the ADEA may be
imposed against the municipality, represented here by the
School District, we must address whether liquidated
damages under the ADEA are punitive and, if so, whether
the imposition of punitive damages against a municipality
is expressly authorized by statute.
  Both the Supreme Court and this court have held that
the liquidated damages provision of the ADEA was intended
to be punitive in nature. Trans World Airlines, Inc. v.
Thurston, 

, 126 (1985); Starceski v.
Westinghouse Elec. Corp., 

, 1095 (3d Cir.
1995). We must therefore examine the language of the
statute to make certain that it applies to municipalities.
   The ADEA makes it unlawful for an employer “to fail or
refuse to hire or to discharge” an individual because of his
or her age. 29 U.S.C. § 623(a)(1). Included in the ADEA’s
definition of employer is “a State or political subdivision of
a State and any agency or instrumentality of a State or a
political subdivision of a State.” 29 U.S.C. § 630(b). The
ADEA could not be more explicit in imposing liability for
age discrimination against municipalities. Similarly explicit
is the ADEA’s contemplation of the imposition of liquidated
damages, as it states in pertinent part “[t]hat liquidated
damages shall be payable only in cases of willful violations
of this chapter.” 29 U.S.C. § 626(b). The FLSA provisions
incorporated in the ADEA provide for the imposition of
liquidated damages “against any employer (including a
public agency),” 29 U.S.C. § 216(b), and the statutory
definition of a “public agency” includes “State[s] or political
subdivision[s] thereof,” 29 U.S.C. § 203(x).
  Furthermore, in dictum we assumed without deciding
that liquidated damages under the FLSA were available
against a municipality. See Brooks v. Vill. of Ridgefield
                              10


Park, 

, 137 (3d Cir. 1999); see also Ray v.
Iuka Special Mun. Separate Sch. Dist., 

, 1253
(5th Cir. 1995) (upholding award of liquidated damages
against a school district under the ADEA when the issue on
appeal was whether the school district had willfully violated
the ADEA); Lee v. Rapid City Area Sch. Dist. No. 51-4, 

, 319-20 (8th Cir. 1992) (en banc) (remanding for
assessment of full liquidated damages against the school
district under the ADEA when the issue on appeal was
whether the district court erred in discretionarily reducing
such damages); Orzel v. City of Wauwatosa Fire Dep’t, 

, 759 (7th Cir. 1983) (upholding liquidated
damages award against municipal fire department under
the ADEA when issue on appeal focused on willfulness).
   In Cook County, the Supreme Court held that under the
False Claims Act (“FCA”) treble damages could be imposed
against municipalities because ever since the statute’s
creation in 1863 its definition of “person” was intended to
cover local governments, and Congress did not manifest an
intent to limit the scope of that definition when it raised the
ceiling on the damages in 

. In
contrast to the FCA, which does not explicitly identify a
municipality as a “person,” the ADEA, in the provisions
quoted above, does explicitly include state and local
governments in the definition of “employer.” Thus, we need
not move beyond the plain language of the statute or go to
lengths to consider the historical context of the statute as
the Court did in Cook County. Rather, the language of the
ADEA itself makes it clear that Congress intended to
subject municipalities like the School District to the
liquidated damages provision of the ADEA.
   Inasmuch as the statute expressly authorizes the
imposition of liquidated damages against a municipality,
even though such damages are punitive in nature, we
conclude that the District Court did not err in assessing
liquidated damages against the School District.
D. Whether the District Court erred in not reducing
the damages award by the amount of retirement
benefits that would have accrued to Potence.
  The jury returned a verdict form that awarded $254,000
in damages, and beneath that monetary figure wrote “back
                             11


pay 3 2/3 years.” App. at 35. The School District asserts
that the award, which was intended to be for back pay,
erroneously included $97,000 in retirement benefits that
legally constitutes front pay. The District Court rejected the
School District’s argument that the amount of damages
awarded was not supported by the record. The Court stated
it would not “second guess the jury and reduce the award
because of a remark written in the margin of the verdict
which may have no relevance with respect to the actual
award.” App. at 15.
   The verdict form did not require the jury to differentiate
between front pay and back pay, and therefore the written
note could have had no significance. Potence agrees with
the School District that the award was likely based on
Potence’s salary schedule computation, which set forth the
back pay calculation for 3-2/3 years as including $121,000
in wages, $36,000 in medical coverage, and $97,000 in
retirement benefits, App. at 82-94, 209-11, totaling
$254,000, the precise amount of damages awarded by the
jury. However, the School District provides no case law
supporting its contention that retirement benefits are
always considered front pay. Potence presented evidence at
trial that $97,000 is the amount of the retirement benefits
that would have accrued to him during the relevant 3-2/3
years. Potence argues that the jury could have reasonably
assumed that he would have worked with the School
District until the time when such benefits would vest,
making these benefits part of earned back compensation.
  Because a district court has an obligation “to uphold the
jury’s award if there exists a reasonable basis to do so,”
and may not “vacate or reduce the award merely because it
would have granted a lesser amount of damages,” Evans v.
Port Auth. of N.Y. & N.J., 

, 351-52 (3d Cir.
2001) (internal quotation marks and citations omitted), we
will uphold the damages award.
E. Whether the District Court abused its discretion in
calculating the reasonable rates for attorneys’ fees.
  We review the reasonableness of an award of attorneys’
fees for an abuse of discretion. Smith v. Phila. Hous. Auth.,

, 225 (3d Cir. 1997). The party seeking
                              12


attorneys’ fees has the burden to prove that its request is
reasonable. Rode v. Dellarciprete, 

, 1183 (3d
Cir. 1990). To meet its burden, the fee petitioner must
submit evidence to support the hours and billing rates it
claims. 

District argues that the following
rates awarded were unreasonable and unsupported by the
record: $200 per hour for Laputka, $150 per hour for
Lentowski, $150 per hour for Sernark-Martinelli, and $85
per hour for paralegals.
  A reasonable hourly rate is calculated according to the
prevailing market rates in the community. Washington v.
Phila. County Court of Common Pleas, 

, 1035
(3d Cir. 1996). An attorney’s usual billing rate is a good
starting point for assessing reasonableness, though it is not
dispositive. Maldonado v. Houstoun, 

, 184-85
(3d Cir. 2001).
   Laputka and four other attorneys in the area performing
the same services submitted affidavits. Their rates ranged
from $150 to $250 per hour. It was not an abuse of
discretion to apply rates within this range for the three
attorneys who worked on this case, regardless of whether
they were hired as contract lawyers or were relatively recent
law school graduates. This is particularly true when the
more junior associates, Lentowski and Sernark-Martinelli,
were awarded the lowest rate within the range.
   With regard to the paralegal rate of $85 per hour, the
School District argues that pursuant to recent decisions on
fee petitions that assessed paralegal rates at $50 per hour,
the District Court should have reduced the rate awarded in
the instant case. See, e.g., James v. Norton, 

385, 400 (E.D. Pa. 2001). However, in those cases the
rates were reduced because it was deemed unnecessary to
bill paralegals at senior paralegal rates when evidence
showed they engaged in low-level clerical work, such as
typing. 

Laputka’s affidavit indicated that the
paralegals involved in the instant case participated in a
broader and more complex range of trial-preparation
activities. The Court was free to accept Laputka’s affidavit
in light of the School District’s failure to provide evidence in
support of its objection. We will therefore uphold the
reasonableness of the paralegal rate.
                             13


                            III.
   In conclusion, the record viewed in the light most
favorable to Potence supports the jury verdict, and the
District Court did not err as a matter of law in granting
liquidated damages or abuse its discretion in calculating
attorneys fees or refusing the requested special
interrogatory. We will therefore affirm.

A True Copy:
        Teste:

                  Clerk of the United States Court of Appeals
                              for the Third Circuit