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Spencer v. Wal-Mart Stores

November 22, 2006

LILY SPENCER, PLAINTIFF--APPELLANT/CROSS APPELLEE
v.
WAL-MART STORES, INC., DEFENDANT--APPELLEE/CROSS APPELLANT



Appeal from the United States District Court for the District of Delaware (D.C. No. 03-cv-00104) District Judge: The Honorable Kent Jordan.

The opinion of the court was delivered by: Restani, Judge

PRECEDENTIAL

Submitted Under Third Circuit LAR 34.1(a) September 29, 2006

Before: MCKEE and AMBRO, Circuit Judges, and RESTANI*fn1, Judge.

OPINION OF THE COURT

This appeal arises from a discrimination action brought under the Americans with Disabilities Act ("ADA") by Lily Spencer ("Spencer") against her former employer, Wal-Mart Stores, Inc. ("Wal-Mart"). Spencer appeals the orders of the District Court vacating her back pay award and reducing her award of attorney's fees to reflect her limited success at trial. Wal-Mart cross-appeals, arguing that Spencer is not the prevailing party and thus is not entitled to any attorney's fees. We will affirm the orders of the District Court.

I. Procedural and Factual Background

Spencer, who is hearing impaired, brought a discrimination action against Wal-Mart, alleging that it did not reasonably accommodate her disability and subjected her to a hostile work environment. The case proceeded to a jury trial on October 4, 2004. The jury rejected Spencer's first claim, finding that Wal-Mart had reasonably accommodated Spencer's disability. The jury, however, decided in favor of Spencer on her hostile work environment claim and awarded her $15,000 for lost wages, also known as back pay, and $12,000 for emotional distress. The jury did not award punitive damages to Spencer.

Afterward, Wal-Mart filed a motion for judgment as a matter of law ("JMOL"), arguing that Spencer failed to establish a claim of hostile work environment and that, even if she had established such a claim, she was still not entitled to back pay. Simultaneously, Spencer filed a motion to amend the judgment to include injunctive relief, as well as a motion for reimbursement of attorney's fees and costs.

The District Court granted Wal-Mart's motion for JMOL in part and denied it in part. The Court upheld the jury finding as to a hostile work environment, but concluded that the back pay issue should not have been presented to the jury. Spencer v. Wal-Mart Stores, Inc., No. 03-104-KAJ, 2005 U.S. Dist. LEXIS 4373, at *7 (D. Del. Mar. 11, 2005). The Court found that this issue was "solely within the province of the court," because back pay is an equitable remedy. Id. The Court then declined to award back pay, noting that Spencer had not requested it from the Court. Id. The Court further stated that, even if Spencer had requested back pay, the Court would not have granted it because she did not allege constructive discharge. Id. As a result, the District Court vacated the jury's back pay award of $15,000. Id.

The District Court also denied Spencer's request for injunctive relief and for reimbursement of attorney's fees. Id. at *11, *15. Specifically, the Court found that injunctive relief was inappropriate because Spencer had not established a pattern of discrimination by Wal-Mart and because Spencer would not benefit from an injunction (as she was no longer an employee of Wal-Mart). Id. at *11--*12. The Court also found that Spencer did not receive any benefit from litigation, because her back pay award had been vacated, and because her emotional distress award was offset by a prior settlement agreement.*fn2 Id. at *15. Thus, the District Court denied Spencer's request for attorney's fees. Spencer then filed a motion to alter and amend judgment and a motion for relief from judgment, arguing that it was appropriate for the jury to consider the back pay issue because back pay is not an equitable remedy. Spencer also contested the denial of attorney's fees. Spencer argued that the settlement agreement did not affect her status as a prevailing party because she signed the agreement after the jury rendered its decision.

The District Court upheld its ruling as to the back pay issue but reconsidered its decision on attorney's fees. Spencer v. Wal-Mart Stores, Inc., No. 03-104-KAJ, 2005 U.S. Dist. LEXIS 39038, at *3--*5 (D. Del. June 24, 2005). The Court agreed that the settlement agreement did not affect Spencer's status as the prevailing party because it was signed after trial. Id. at *5. The Court reasoned that the timing of the agreement was important because it indicated whether Spencer "had gone into the trial having already bargained away her potential recovery." Id. The Court, however, found that Spencer had achieved limited success at trial, and thus, it reduced her lodestar*fn3 by 75% and awarded her $38,569.34 in attorney's fees. Id. at *12.

Spencer appeals both orders of the District Court, arguing that the Court erred in vacating her back pay award and reducing her award of attorney's fees. Wal-Mart cross-appeals, arguing that Spencer is not the prevailing party and that she is not entitled to any attorney's fees. We first examine the parties' arguments as to the ...


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