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MCKENNA v. PACIFIC RAIL SERV.

March 29, 1993

Re: Peter McKenna, et al
v.
Pacific Rail Service



The opinion of the court was delivered by: NICHOLAS H. POLITAN

 Dear Counsel:

 This matter comes before the court on the following motions: (1) defendant's motion for judgment as a matter of law on the issue of liability pursuant to Fed.R.Civ.P. 50(b); (2) defendant's motion seeking a new trial, or in the alternative, for judgment as a matter of law on damages or for remittitur; (3) plaintiffs' motion for prejudgment interest; (4) plaintiffs' application for attorneys' fees and (5) plaintiff Nazare's motion to vacate his dismissal from the Complaint. For the reasons outlined herein, defendant's motion for judgment as a matter of law on the issue of liability is DENIED; defendant's motion seeking a new trial is DENIED; defendant's motion seeking judgment as a matter of law on the issue of damages is GRANTED WITH RESPECT TO FRONT PAY; plaintiffs' motion for prejudgment interest is GRANTED; plaintiffs' application for attorneys' fees is GRANTED IN PART AND DENIED IN PART; and plaintiff Nazare's motion to vacate his dismissal from the Complaint is DENIED.

 BACKGROUND

 On January 4, 1991, twenty-eight (28) individual plaintiffs filed an action in the New Jersey Superior Court, Law Division, against defendant Pacific Rail Service ("Pacific Rail") alleging age discrimination against plaintiffs in violation of the New Jersey Law Against Discrimination ("LAD"), N.J.S.A. § 10:5-1, et seq. Plaintiffs claimed that Pacific Rail failed and refused to hire them because of their age. Thereafter, defendant removed the action to this court on diversity grounds.

 Ten of the twenty-eight plaintiffs who had initiated this litigation have been dismissed from the case. One plaintiff whose claim was dismissed for failure to prosecute this matter, Anthony Nazare, has filed a motion to vacate his dismissal. This opinion addresses only Nazare's motion and the claims of the remaining eighteen plaintiffs. Plaintiffs' claims on liability, as tried before the jury, can be outlined as follows:

 Consolidated Rail Corporation ("Conrail") operated an intermodal facility for the transportation, loading and unloading of freight at 6201 Tonnelle Avenue, North Bergen, New Jersey ("North Bergen terminal"). In the period from 1960 to September 1, 1990, lift operations at the North Bergen terminal were performed by employees of Pennsylvania Truck Lines, Inc. ("PTL"). PTL employees also performed lift operations at a Conrail intermodal facility in South Kearny, New Jersey. PTL was a wholly-owned subsidiary of Conrail until sometime in 1990, when a group, including certain PTL managers, purchased PTL in a leveraged buy-out.

 Plaintiffs are former employees of PTL who worked as yard or clerical employees at the North Bergen terminal. All of the plaintiffs were over 40 years old as of August 1990. Many of the plaintiffs worked for PTL or its predecessor corporations for more than 30 years.

 In June 1990, Conrail requested bids for its lift operations at the North Bergen terminal. Among the bidders was Pacific Rail. At the time, Pacific Rail was one of the largest independent intermodal operators in the United States. In or about mid-August 1990, Conrail awarded the bid to Pacific Rail.

 Prior to September 1, 1990, Pacific Rail sought applicants to staff the North Bergen terminal. Jerry McCormick, a Pacific Rail Terminal Manager in Elizabeth and the future Pacific Rail Terminal Manager at North Bergen, was the person responsible for hiring individuals to work at the North Bergen terminal.

 Shortly after Pacific Rail won the bid for the North Bergen lift operations, Peter McKenna, the shop steward for the North Bergen yard employees, informed Jerry McCormick by telephone that the North Bergen yard and clerical employees were willing to work for Pacific Rail. McKenna asked McCormick to supply the North Bergen employees with job applications. On August 20, 1990, McCormick went to the North Bergen yard and gave McKenna blank job applications. McKenna distributed the job applications to the North Bergen PTL employees.

 On approximately 25 completed applications from the North Bergen yard and clerical work force to McCormick. At that time, McKenna requested additional applications from McCormick. McKenna asked McCormick to return to the North Bergen terminal on the following Monday, August 27, 1990, to pick up the remaining completed applications. McCormick did not return, however, and on September 1, 1990, R. Michael List, the Pacific Rail Assistant General Manager, gained possession of the remaining job applications completed by North Bergen PTL employees.

 Prior to September 1, 1990, aside from accepting some of the completed job application forms from McKenna, Pacific Rail made no effort to contact the North Bergen PTL yard or clerical employees concerning possible employment with Pacific Rail, even though Pacific Rail knew that the PTL employees desired to work for Pacific Rail. Nor did Pacific Rail make any effort to gain timely possession of the second group of completed applications.

 List testified at trial that the only reason for the decision not to hire the former North Bergen PTL employees was the individual work habits and attitudes of those individuals. There is no evidence in the record, however, to indicate that Pacific Rail ever evaluated the individual work habits and attitudes of the former North Bergen employees. Nor is there any evidence in the record, aside from certain comments made by McCormick, that Pacific Rail had before it any information about the applicants from PTL in North Bergen apart from the responses in the perfunctory applications and, most importantly, the ages of the applicants.

 Prior to September 1, 1990, Pacific Rail hired 13 yard employees and 8 clerks to staff the North Bergen operation. None of the individuals hired were former North Bergen PTL employees. Seventeen of the twenty-one people hired were under the age of 40. Subsequent to September 1, 1990, Pacific Rail hired four additional yard employees. All were under 40. No additional clerks were hired after September 1, 1990. In total, 21 of 25 clerical and yard employees hired by Pacific Rail were under 40 years old.

 After September 1, 1990, John Gittens, a former PTL supervisor hired by Pacific Rail, recommended four former PTL North Bergen yard employees to be considered for employment: Ralph Angolemmo, Joe Armetta, Anthony Nazare and Richard Montacalvo. Angolemmo and Armetta were in their 20s and Nazare and Montacalvo were over 40. Pacific Rail hired Angolemmo and Armetta but did not hire Nazare and Montacalvo. Armetta and Angolemmo were two of the less qualified North Bergen PTL yard employees.

 Ed Cifune, who was employed in a supervisory capacity for PTL at the North Bergen terminal from 1984 to 1990, testified at trial. From 1987 to 1988, Cifune was the Assistant Terminal Manager and from 1988 to 1990 he was the Terminal Manager at North Bergen. Cifune gave the clerks and yard employees high marks for their work habits and attitudes. For example, PTL had established Quality Circles in which a number of employees participated. The North Bergen workers had good attitudes and "they realized the importance of their job[s]." The clerks were "well versed" in procedures. The PTL-North Bergen clerks "would go the extra mile to get the work done." From 1984 to 1990, the number of clerks in North Bergen decreased from 12 to 7, yet the work load increased. Cifune testified that "you didn't have to worry about the clerks, they knew their job and they did it." Cifune rated the work ethic of the PTL clerks in North Bergen favorably as compared with the work ethic of the clerks at the South Kearny terminal. The North Bergen clerks worked "more efficiently" than the South Kearny clerks.

 There was testimony that the yard employees were also proficient in their jobs. They "knew [their jobs] and they knew what [the jobs] entailed." The yard employees were complimented by supervisors on the quality of their job performance.

 Each of the plaintiffs was rated positively by his or her supervisor:

 1) Jeanette McCafferty- "She was an excellent worker."

 2) Ralph Fernandez - "He was a very meticulous worker."

 3) Phyllis Lindh - "She was always diligent in her job."

 4) Paul Noethe - "He saved Conrail in one instance alone fines of roughly $ 10,000 a trailer [for] 19 trailers they were asked to trace. I think that, in itself, speaks of [the] quality of his work."

 5) Sal Petruzzelli - "He was an excellent worker."

 6) Ed Dechert - "He did his job the way it was supposed to be done."

 7) Pat Burwitz - "She was very helpful and instrumental."

 8) Mike Demone - "He did an excellent job."

 9) Peter McKenna - "An excellent worker. . . . He always did his job."

 10) Gregory Spina - "Spina was an excellent packer operator." He was called "Mr. Wonderful" by the Terminal Manager Milarski.

 11) Jack Ricciardi - "He always did his job. He never shirked."

 12) John Oliver - He was helpful in "getting the trains out on time."

 13) Pincus Cohen - "He was particularly helpful when programming a train."

 14) Bill Harper - "An excellent worker. . . . He never said no."

 15) Dorrance Lindh - He "was as helpful as Mr. Cohen and the others on the shift in getting the trains out on time."

 16) John Shea - "He was one of the first to pick out any defects that might exist."

 17) Bob Tighe - "An excellent worker. He always gave 100 percent."

 18) Dennis McCarthy - "When you needed him and made a phone call, he was there."

 From 1984 to 1990, many concessions were agreed to by the North Bergen employees to make the employer more efficient. During that period, the yard work force decreased by one-third while the volume increased by 14%. From 1984 to 1990, the cost of the yard operation at North Bergen also decreased from approximately $ 23 per lift to $ 7.25 per lift. In 1990, the cost of the yard operation in South Kearny was approximately $ 7.75 per lift.

 Moreover, the PTL North Bergen operation was more efficient than the PTL South Kearny operation. The North Bergen yard averaged 9,200 lifts per month. The South Kearny yard averaged 25,000 lifts per month. The South Kearny yard had approximately 100 employees on the seniority list with approximately 70 yard employees working on the lift operation on a daily basis. South Kearny had over three times the daily yard employees of North Bergen, yet the South Kearny yard performed only approximately 2-1/2 times the lifts as North Bergen. Therefore, the lift per man hour rate was lower at South Kearny than at North Bergen.

 Cifune testified that at the North Bergen facility "99% of the time the departure of the trains [was] on time." According to Cifune, the few times the trains were delayed was the result of scheduling problems. From 1984 to 1990, delays caused by the work force occurred no more than three or four times.

 Pacific Rail did hire a number of former PTL South Kearny employees, including Tim Byrne, James Flynn, Michael Krommenhoek, Thomas Krommenhoek and Jorge Velez. These former South Kearny PTL employees had disciplinary problems. Michael Krommenhoek and Thomas Krommenhoek were discharged three weeks after they were hired by Pacific Rail.

 To support their case, plaintiffs attempted to designate a statistical expert after the close of discovery. Magistrate Judge Ronald J. Hedges determined that plaintiffs' attempted late designation of a statistical expert would be treated as a motion to amend the Pretrial Order. The resulting motion to amend was later denied by the Magistrate Judge. His Order was affirmed by this Court in an unpublished Letter Opinion and Order dated July 29, 1992.

 As to their claim for damages, plaintiffs' Complaint included a "Demand For Relief" in which they prayed that Pacific Rail Services be ordered "to offer employment to plaintiffs and make them whole for all wages and benefits lost by reason of defendant's unlawful discrimination." *fn1" Plaintiffs did not request front pay as a separate, or alternative, element of damages.

 In the pretrial Order entered in this proceeding, plaintiffs included two assertions of fact concerning what they intended to prove on the issue of damages. These included:

 
36. As a result of defendant's actions, plaintiffs have lost income and otherwise suffered the effects of discrimination on account of age.
 
37. As a result of defendant's actions plaintiffs have been caused emotional distress.

 Plaintiffs never sought to designate any expert to testify as to damages. Judge Hedges ordered stricken from the pretrial Order plaintiffs' claim for emotional distress damages. The Magistrate further ordered plaintiffs to quantify their damages by March 16, 1992. plaintiffs never complied with this latter order by Judge Hedges.

 As part of their pretrial submissions to the Court, the plaintiffs filed and served upon the defendant a Trial Memorandum. The memorandum described this case as one in which plaintiffs sought "a judgment ordering defendant to offer them employment and to pay back wages, compensatory damages, punitive damages and attorneys' fees." Plaintiffs concurrently submitted proposed Jury Charges, among which were included a number of instructions dealing with "emotional anguish," "expert witnesses" and "conflicting expert testimony," all of which had been stricken by Judge Hedges and the Court. Included among these instructions was a one-sentence front pay charge. Defendant's proposed jury charges contained no front pay instruction.

 The case was tried to a jury from September 15, 1992 to September 30, 1992. Plaintiffs testified as to their difficulties in attempting to obtain suitable employment after their discharge from PTL. Additionally, evidence was admitted regarding the salaries and benefits of the individuals who were hired by Pacific Rail.

 On September 29, the Court convened a jury-charge conference on the record, where a number of issues were discussed. Defendant specifically objected to plaintiffs' proposed front pay instruction, pointing out that this case had never been litigated as a front pay case, that there had been no expert testimony regarding present value of earnings, and that a substantial number of plaintiffs were taking retirement. Defendant argued that all of these factors mitigated against any front pay instruction.

 In addition to its general objection to any front pay instruction, defendant specifically objected to the language of the proposed front pay instruction, arguing that it was improper to permit the jury to calculate front pay on the basis of retirement age. Despite the Court's invitation, counsel for defendant did not provide curative language to the front pay instruction as written. The Court, sua sponte, then amended the final sentence of the front pay charge. Ultimately, the front pay charge read as follows:

 
Plaintiff is also seeking front pay. Front pay consists of the total earnings, if any, which you find plaintiff has proven he or she will lose from today until the plaintiff reaches the age he or she would have retired. If you have awarded back pay to a plaintiff, then you may, but you are not required to, award front pay for any part of the period between now and plaintiff's retirement age for which you find that plaintiff has shown by a preponderance of the evidence that he or she would have been employed by defendant but for age discrimination.
 
Again, as with back pay, you may cut off the front pay or you may decline to award any front pay at any point that you believe the evidence to show that plaintiff failed to use reasonable efforts to find a job or beyond which he or she should not be compensated as a result of the age discrimination.

 Defendant's counsel objected to the language as modified.

 On September 30, 1992, the jury rendered a verdict in favor of plaintiffs and awarded plaintiffs damages in the amount of $ 7,191,500 which included a $ 5,743,500 award for front pay and a $ 1,448,000 award for back pay. The individual awards are summarized in the Appendix to this Opinion.

 The front pay award was apparently calculated by multiplying the number of years remaining between each plaintiff's present age and age 65, times the projected salary for those years had each plaintiff worked for Pacific Rail. Harper and Petruzzelli, who had reached age 65 by the time of the jury's verdict, were awarded no front pay. Plaintiffs Burwitz, Cohen, Dechert, McCarthy and Spina were awarded amounts for which no further computations ...


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